By Asif Shahzad, Ariba Shahid and Fayaz Bukhari ISLAMABAD/SRINAGAR, India (Reuters) -Pakistan closed its air space for Indian airlines and rejected New Delhi's suspension of a critical water sharing treaty on Thursday in retaliation for India's response to a deadly Islamist militant attack on tourists in Indian Kashmir.

The nuclear-armed rivals, which both claim Kashmir and administer separate parts of it, are at a dangerous crossroad after Tuesday’s militant attack, analysts said.

The agreement split the Indus and its tributaries between the two countries and regulated water sharing. India was granted the use of water from three eastern rivers - Sutlej, Beas and Ravi - while Pakistan was granted most of the three western rivers - Indus, Jhelum and Chenab.