As the foreign minister declared his country was now a nuclear weapons state, US satellites indicated that Pakistan may have implanted another nuclear device in a shaft at a second site and stemmed it with concrete, preparing for what appears to be another test any day now. The second site is by a river-bed near Dalkaroin.

Tarrar had invoked the proclamation citing external threats to the country. It led to suspension of fundamental rights, including recourse to courts, and freezing of the operation of foreign currency accounts held in the country.

At 9.30 am, the board of the Karachi Stock Exchange decided to keep the Bourse shut as the day had been declared a bank holiday bythe government the previous evening. The decision was seen as a move to prevent a run on the banks, which would have been disastrous for the country.

Addressing a press conference in the evening, Finance Minister Sartaj Aziz declared that the move to suspend operation of foreign currency accounts, in which Pakistanis have saved over $ 9 billion was "temporary". The government announced reliefs for non-residents, diplomatic missions and certain categories of companies.

Also, in order to appease the stock market, which has hit a five-year low, the government allowed free repatriation of funds for companies and entities that invested in portfolios. Bankers said the biggest challenge before Pakistan now was to avoid a default-like situation within two months. "The biggest question is how Pakistan will achieve that," said a top banker.

Sabre-rattling continued as Foreign Minister Gohar Ayub Khan vowed in an interview that Pakistan would retaliate with "vengeance" to any attack by India. But the man on thestreet betrayed no panic. Muhammad Musa, who sells combs at crossings, said he was worried about the spiralling prices but did not have the money to stock essentials like wheat, sugar and rice. "But now we are a superpower," he observed.

Businessman Danish Tapal said he had anticipated the move by the government as "this was the only way to go under the circumstances." But there were dissenting voices too. Former Commerce minister Zubair Khan said the decision to freeze forex accounts was "too drastic". He said the sanctions imposed against India were such that Pakistan too could have lived with them with some tightening of belts. "This move has shattered confidence in Pakistan," he added.

More tests likely, US tilts towards Pak