DATE=8/14/1999 TYPE=CORRESPONDENT REPORT TITLE=PAKISTAN / INDIA / L-O NUMBER=2-252793 BYLINE=AYAZ GUL DATELINE=ISLAMABAD CONTENT= VOICED AT: INTRO: Pakistani Prime Minister Nawaz Sharif says his country wants peace with India, in spite of the downing of a Pakistani naval plane by Indian jets, Tuesday. But Mr. Sharif is warning India there is - in his words -- "a limit to everything." As Pakistan observes its 52nd independence anniversary today, Ayaz Gul reports tensions remain high between the two rival nations, with forces from both countries on high alert. TEXT: In a speech marking the 52nd anniversary of Pakistan's independence, Prime Minister Sharif says India is not serious about establishing peace in the region. // SHARIF ACT IN URDU, FADE UNDER // Prime Minister Sharif says the downing of an unarmed naval plane by India shows the world which country wants to destroy peace. Mr. Sharif says Pakistan's restraint, in the face of a provocative act, should not be seen as weakness. He says Pakistan has the capability to respond, if war is imposed on it. India shot down the Pakistani anti-submarine plane Tuesday. New Delhi says it was on a spy mission, ten kilometers inside India's southern border with Pakistan. The incident occurred just weeks after the two nuclear powers came close to war over the disputed Kashmir region. The crisis ended after Pakistan agreed to call for the pull-back of the Kashmiri insurgents from mountain peaks on the Indian side of Kashmir. Prime Minister Sharif says his government's appeal last month to Islamic fighters to withdraw from Indian Kashmir shows Pakistan wants to bring peace to the region. But he says India's latest military action has upset his efforts to restore peace between India and Pakistan. Mr. Sharif maintains that -- unless the 52-year Kashmir dispute is resolved -- the threat of another war between Pakistan and India will remain there. India refuses Pakistan's call for talks to settle the Kashmir dispute, saying Islamabad must first stop sending Muslim militants to Indian Kashmir. Pakistan denies any involvement with the insurgents. (signed) NEB / AG / wd / wd 14-Aug-1999 07:38 AM LOC (14-Aug-1999 1138 UTC) 14-Aug-1999 19:53 PM EDT (14-Aug-1999 2353 UTC) NNNN Source: Voice of America .