On his part, the Indian Prime Minister Atal Behari Vajpayee hinted that India may do rethinking on the voluntary moratorium on further Nuclear tests. And leading the condemnation of the entire world, the Clinton administration slapped sanctions and blocked aid as Britain, Germany, Japan and NATO also rapped Pakistan. Significantly, China expressed its ``deep regret'' over the tests but its foreign minister Zhu Bangzo blamed India for starting a dangerous nuclear arms race in SouthAsia saying New Delhi was `single-handedly' responsible for creating tensions in the region by conducting five nuclear tests this month.

In his hard-hitting thirty-minute speech, Sharif lashede out at India repeatedly for forcing Pakistan into detonating its nuclear devices.

``The Indian government forgot all norms of decency after they exploded their nuclear devices,'' said the Pakistani prime minister, adding ``now we have given them a fitting response.'' He said: ``If the enemy threatens Pakistan, I cannot sit idle. I am not the nominee of a cowardly nation.''

Sharif warned the people of tough times ahead but said that the sanctions that will be imposed on Pakistan will make the country stronger. ``We faced military sanctions and we managed to make the nuclear bomb. Now we face economic sanctions and we will emerge stronger economically.''

He said that the coming months for Pakistan would be very tough. ``We all have to make sacrifices,'' he said. The Pakistani prime minister said that he wouldexemplify simple living by leaving the luxurious PM's secretariat in Islamabad for something more simple. He said that this trend will be followed by other government officials.

He said that he would be coming out with a ``national agenda'' in the next few days. He added that he would wage a war against smuggling, tax theft, power and gas theft and try and shun foreign aid in the coming budget. ``We must learn to stand on our feet,'' he added.

Sharif praised China for understanding Pakistan's predicament. He said that China was a true and time-tested friend of Pakistan. Sharif called India an expansionist power that was now threatening the Pakistani side of Kashmir.

While announcing the explosions, Pakistan said it was giving nuclear muscle to the Ghauri missile which it tested on April 6. ``The long-range Ghauri missile is already being capped with nuclear warheads to give a befitting reply to any misadventure by the enemy,'' an official statement said.

The strongest test today registered apreliminary magnitude of 4.9, according to US sources. Sharif said that he had talked on five different occasions to US President Clinton and tried to explain Pakistan's position. ``President Clinton understood what we were saying,'' said Sharif. Sharif praised Japan's concern based on its high human values but commented that if Japan had the bomb, ``then Hiroshima and Nagasaki would never have happened.''

As soon as the state-owned Pakistan Television announced the news of the successful nuclear tests at 4.30 p.m., people came out to the streets in celebration, exchanged sweets, fired in the air, danced and exchanged greetings over what they saw as Pakistan's great achievement.

"We have shown India that we are not a defenceless nation," said Muhammad Rasheed, a government employee in Islamabad. Suheil Siddiqui, a trader, said: "We have made the muslim world proud." "I am a proud Pakastani today," said businessman Adnan Salim in Karachi. Salim said that he expected Pakistan's economy to overcome it'sproblems in a few months.

But economists are not sure of that. Major brokerage houses in Karachi went into a meeting to discuss future strategy and concluded that the explosions may also have a major effect on the Karachi Stock Exchange and the economy. There are expectations of a run on banks on Friday as Pakistanis try and withdraw dollars from their foreign exchange accounts.

There were strong rumours that Pakistan may try and freeze foreign exchange accounts in the coming days although no announcement was made on Thursday evening.

Hanif Kalia of Khanani and Kalia International predicted that the Pakistani rupee will touch the Rs 50 to the dollar mark in the coming week as pressure increases on Pakistan's foreign exchange reserves. Currently the dollar stands at Rs 46.05 and reserves are at $ 1.5 billion.

Inflation is another area where analysts expect deterioration. Roughly 25 per cent of Pakistan's $ 13 billion budget goes towards defence spending.

Pakistan has been living with US sanctionssince 1990 when Washington cut all military and humanitarian aid to Pakistan as it believed that the country had a nuclear bomb. At the time, Pakistan was one of the largest recipients of US aid.