“Prime Minister Nehru’s statement in the House of People yesterday that US members of (the) UN observer group in Kashmir can no longer be regarded as neutral and hence their continued presence is improper was featured in eight column headlines in (the) local press today and may be regarded as (the) chief positive Indian step in response to (the) Pakistan aid decision. It remains to be seen whether (the) GOI (Government of India) will follow-up with further measures in New York to achieve elimination of US members. It is possible (that) US personnel in Kashmir may be subjected to restrictions on (the) Indian side of (the) ceasefire line.
I do not believe we should take any position on Nehru’s observation for the time being. It goes without saying that whatever position we finally take should carefully avoid (the) possibility of interpretation as admission that US observers have been in any way unneutral.
1963: China, Pakistan Sign Border Deal
Pakistani Foreign Minister Zulfikar Ali Bhutto signed an agreement in Beijing ceding to China 2,700 square miles of Pakistani-controlled Kashmir in return for 750 square miles from China. India, which also claimed the land ceded by Pakistan to China and which had just fought a border war with China, rejected the agreement as illegitimate.
The move by Pakistan put an end to talks, then underway with India, over Jammu and Kashmir.