A much-awaited Eid package to break the impasse in Kashmir is expected to be discussed at the crucial meeting here today of Cabinet Committee on Security (CCS) which will deliberate on the issue of partial withdrawal of controversial AFSPA in the state.

Prime Minister Manmohan Singh and Congress President Sonia Gandhi had a threadbare discussion with Cabinet colleagues and senior party leaders in the Congress Core Group on Friday on the issue after which indications had emerged that government could announce some initiatives to end the three-month-long cycle of violence in the valley.

However, a sudden flare-up of violence in Srinagar on the day of Eid appeared to have put the Government in a spot. The opposition BJP also warned that any dilution to Armed Forces Special Powers Act (AFSPA) would only allow the separatists to call the shots.

Jammu and Kashmir Chief Minister Omar Abdullah has been pressing the Centre to withdraw the AFSPA from some areas of the state and announce some political initiatives.

Omar, who arrived here on Saturday evening, said he was working with the Centre on confidence-building measures to restore normalcy in the Valley.

But genuine questions would arise on how the process could be carried forward if violence goes on, he said adding, it is a "chicken and egg situation -- what comes first".

Faced with tough choices, the Central government is treading a cautious path over the issue which has created divisions within it.

The government is faced with strong resistance from the Defence Ministry as well as the Army for even a partial withdrawal of the AFSPA or any other kind of dilution in the controversial act which gives sweeping powers to security forces.

On its part, top leaders of the BJP, who met here this evening, cautioned the Centre against any dilution of AFSPA saying this is not the time for appeasement of separatists.

"This is a time for action. The government should not under any circumstances consider lifting the AFSPA from any disturbed district of the state," it said.