The question is, why would we want India to come 'running for peace?'
If memory serves, it was the Indian side that initiated this recent talks offer. We can argue all day about how America twisted Manmohan's arm and how he had to give in, but that is besides the point. India, at the end of the day, initiated the offer.
If we're discussing ways in which we can hurt each other, the air transit issue is small fry... there are very significant problems that can be created for both sides. I've noticed that in many of your posts you keep bringing up India's supposed ability to use water as leverage. I will have to disagree. Here's why. Water will only serve as leverage if India pilfers enough of it to make a real difference. At that point, not only will the IWT be seriously violated with the arbitration/diplomatic implications of it coming into play, if it gets too bad, make no mistake, Pakistan will probably not discourage Kashmiri freedom fighters from "reconfiguring" the offending dam(s).
Then what? Full on war? Fine. You have to ask yourself if India will risk full scale destruction to hold on to the water card.
On the other hand, there is no IWT like treaty on oil/gas and trade transit. Nor is there any agreement or treaty that requires Pakistan to allow India to access Afghanistan or Central Asia. Long term, I think the water leverage is hokey because the scenario just doesn't play out to a logical conclusion where Pakistan is significantly harmed and can't do anything in return. On the other hand, Pakistan can justifiably and without violating any treaties, prevent India from accessing the world's largest reservoirs of energy. That's just one type of potential response.
