The attack, one of the biggest to target civilians in the troubled region in recent months, took place near a remote hilly village in Poonch district, about 250 km (160 miles) north of Jammu, winter capital of Indian Kashmir, police said.

"They descended on the village around 1:30 am (9:00pm British time on Friday), barged into a house and fired indiscriminately on sleeping villagers," a police officer told Reuters by telephone from Poonch.

PL Gupta, inspector general of police for the Jammu region, said the dead included four children aged three, four, eight and 13 and a 17-year-old girl. Ten people were also wounded in the attack, four of them critically, he added.

"The seven men killed were all members of the local village defence committee," Gupta said, referring to groups of villagers who are armed and trained by Indian security forces to guard remote hamlets from militant attacks.

The dead were all Muslims, police added. No militant group has claimed responsibility for the attack.

The killings took place hours before Pakistani Foreign Secretary Riaz Khokhar was due in the Indian capital for talks beginning today to tackle the Kashmir dispute, at the core of half a century of hostility between the nuclear-armed neighbours.

The two-day talks between Khokhar and his Indian counterpart Shashank, who uses only one name, will be the first to focus on Kashmir since a failed summit between Pakistani President Pervez Musharraf and then Indian prime minister Atal Behari Vajpayee in mid 2001.