Given the current circumstances, the solution to the Kashmir issue has to be a joint one. No single party can hope to 'resolve' this problem unilaterally. Here's how the problem can be solved:
- Combine POK and Indian administered Kashmir in to one entity
- Give it some sort of legal status that makes it neither independant, nor a part of India nor a part of Pakistan.
- Conduct elections to form a broad-based government
- Have a third-party monitor, like the UN, oversee the process. Keep America out.
- Have assurances from both sides that they will not resort to violence on civilians/armed forces/police
- Have a mixed force of Indian and Pakistani soldiers ensure security
- Set up a mechanism where violators will face stern action
These are some tough steps that need a lot of trust and understanding for success to be possible. But the results will show. Economic development, increased tourism, de-escalation of violence and the threat of war, a lesser resource strain for India and Pakistan, political participation for the Kashmiri people, build-up of trust between the two nations, to name a few
But without some sort of mutual redressal system, Kashmir will just be a resource drain for India and Pakistan.
And more dangerously, a certain cause for a future war that will not be like any war we've fought before.