Jammu and Kashmir conflict heating up again

As Russian army (and many irregulars) roll through central Georgia untrammeled, another conflict seems to be coming to a boil as well: the imbroglio between India and Muslim separatists in Kashmir. I don't know if people have been following this situation, but, recently, the Indian central government (the "Centre" as they call it) considered giving over some forest land to a development group with the intent of improving facilities for the thousands (possibly even millions) of Hindus who make the trek to Amarnath temple (located in Kashmir) annually. Some of the Muslim separatist factions in Kashmir decided to raise a ruckus about this, claiming that the development group was a front set up by the Hindu nationalist party, BJP, to alter the demography of Kashmir (ie, resettle Kashmir valley with Hindus to sway political decision-making in the valley).
Now, to be honest, at first, I just thought this was another of the many pathetic posturing exercises that the seemingly endless political factions indulge in on a regular basis. But, it turned out to be quite a bit more. Apparently, the level of protests, both in Muslim-majority Kashmir and Hindu-majority Jammu, has risen to levels that have not been seen since the early 1990s. Reuters had this to say about the newly-brewing conflict:

Indeed, some fear Kashmir will become a diplomatic football once again between the two nuclear rivals, with New Delhi unsure of a new civilian government in Islamabad that it perceives is in a dangerous vacuum.

Clearly, this is no longer just posturing.
However, I find the situation rather frustrating. Do the separatists actually think their lives will be "better" once they separate from India and, maybe, join Pakistan? Even putting aside the large sums of money India pours into Kashmir on an annual basis for development and what not (seemingly to no effect), separating from India would be economic suicide for the region. If they could get their act together, Kashmir, as part of India, would be a huge tourist attraction (as it used to be prior to the terrorism that began in 1989). As part of Pakistan, an Islamic Republic, the prospect for tourism/trade/etc. fall dramatically (simply because foreigners feel less comfortable dealing with a religious nation than with a secular one). As an independent state, Kashmir's prospects are even worse; how likely is it that Srinagar airport (the only viable international airport in the valley) will be able to provide as easy access to Kashmir for tourists as ... all of the transportation access points to India available to foreign tourists? Thinking simply about their own best interests would convince most "separatists" to accept India with open arms.
This is the reason that I find the notion that the separatists in Kashmir are entirely home-grown to be a total hogwash. There has to be external pressure for separatism in Kashmir; no Kashmiri, Muslim or Hindu, would ever think that seceding from India is in his/her best interests. Therefore, there are external actors that are stoking the fire. And I am not simply talking about the ISI of Pakistan (CIA/FBI equivalent), who have been accused recently of fabricating the whole notion of an economic blockade by Jammu Hindus of the only access route via truck to Kashmir. No, several Indian political parties stand to benefit from making Kashmir a conflict zone, notably the BJP. The BJP is fuelled by radicalization of Indian politics and so, it is no surprise that the BJP (and its close friend, the RSS) took up the "Hindu" cause of the Amarnath land transfer (aside: this is where one sees how important language is; BJP/RSS very consciously made something that could easily have been a development-related issue into a Hindu/Muslim conflict to foment religious radicalism on both sides) as soon as they sensed that Hurriyat and PDP (Muslim-majority political parties in Kashmir) were trying to polarize the issue in religious terms (I guess Hurriyat and PDP also know how to play the language game).
If all these external actors had never meddled with the extremely complex religious relations extant within Kashmir, not only would there no longer be a problem in that Indian state, but the whole notion of a Kashmir problem would probably not exist.

[2008-08-14] Update: I was wrong when I said that the Amarnath project was spearheaded by the central government of India; the state government was the one that started the land development project.

[2008-08-21] Update: A commenter on I Me My had some interesting comments that I chose to respond to here. Please read that, as I feel it is an interesting extension on what was written here.

[via Reuters]