The seizure of tourists as hostages by a radical splinter group in Kashmir, and the grisly murder of one captive, is further evidence of the mountainous Indian state's descent into anarchy. The question now is whether the state of Jammu and Kashmir can be lifted toward a political dialogue between the Indian government and rebels bent on independence. India's image has rarely been more tarnished in the eyes of a majority of Kashmiris than now, following the June siege and burning of the historical town of Charar Sharif. But anger with India doesn't mean Kashmiris approve of the radical separatists in their midst. Other, more established rebel groups have disavowed the tactics of the hostage-takers. And average Kashmiris are likely to see this latest incident as a final blow to their tourist-dependent economy. In an atmosphere dominated by violence - much of it spilling over from rebels who fought in Afghanistan's interminable conflict - moderation and compromise can seem voiceless. But a settlement may still be attainable. India has said it will never let Kashmir go. But India's politics in recent years have seen the ascent of regional, culturally based parties in states like Tamil Nadu and West Bengal. These parties have operated with a good deal of independence from the central government in New Delhi. India's Constitution recognizes Kashmir as a part of the country with a peculiar need for autonomy, given its history of conflict and its Muslim majority, unique among Indian states. Originally, Kashmir was to have extraordinary self-governing powers, including its own constitution. Full implementation of those provisions would infuriate many in India, where Hindu nationalism has revived as a potent political force in recent years. With national elections likely by next spring, Indian politicians might want to tiptoe around Kashmir. That could allow the situation to become even more inflamed. But Prime Minister P.V. Narasimha Rao has indicated he's willing to consider greater autonomy for Kashmir. Politically risky as that now is for him, it's to be hoped he will pursue some kind of step-by-step moves toward greater autonomy. That could be a plus for Indian democracy and for travelers everywhere who would like to put Kashmir's natural splendors back on their must-see list.