Acting on a tip, police tonight thwarted a possible terrorist attack on the eve of India's biggest holiday, killing two armed men during a gun battle at one of this city's fanciest shopping malls.

Police identified the men as members of Lashkar-i-Taiba, a militant group based in Pakistan that allegedly participated in an assault on the Indian Parliament last December that triggered a military standoff between India and Pakistan. There was no independent confirmation of the claim.

The shootout occurred in the basement parking lot of Ansal Plaza, an upscale mall crowded with last-minute shoppers on the eve of Diwali, the Hindu festival of lights. The gunmen arrived by car, and were killed in a 15-minute shootout with plainclothes police who had been deployed to the mall in anticipation of a possible terrorist attack, authorities said. One policeman was reported wounded.

Police said they had recovered two Chinese-made pistols, an AK-56 rifle and spare ammunition clips.

Had the gunmen carried out an attack, the repercussions could have been especially grave. The incident occurred in a wealthy area of the capital at the most joyful time of year, a long holiday weekend filled with parties, gift-giving and fireworks displays.

"They hit the poshest mall in Delhi," a Western diplomat said. "Anyone doing any last-minute shopping would be there. Just think of the comparison -- an attack on a major shopping mall in the U.S. or Europe on Christmas Eve. It could have been disastrous. It's a worrying development."

Lashkar-i-Taiba is one of the most lethal militant groups fighting India in the disputed Himalayan region of Kashmir. It is one of two groups blamed for the attack on Parliament last year. In January, under heavy pressure from the United States, the Pakistani president, Gen. Pervez Musharraf, banned Lashkar-i-Taiba and four other militant groups as part of a campaign against Islamic extremists.

India remains skeptical of Musharraf's intentions and accuses him of continuing to support "cross-border terrorism" in Kashmir, despite his pledge last spring to put an end to militant incursions across the cease-fire line that divides Indian and Pakistani forces in the region. Last week, Pakistan released the former head of Lashkar-i-Taiba, Hafiz Sayeed, after five months in custody. He is reportedly under house arrest.

After the attack on Parliament, India deployed 700,000 troops to its border with Pakistan, which responded in kind. India began withdrawing its forces last month, prompting Pakistan to do the same. But relations between the two countries are stuck in a deep freeze. India's deputy prime minister, L.K. Advani, last week described Pakistan as "the epicenter of global terrorism." Pakistani officials say that Musharraf has honored his pledge to crack down on militant groups and accuse India of reneging on its obligation to open a dialogue on the future of Kashmir.

A shopper stands next to his car, damaged in a shootout between police and two suspected Islamic militants at a shopping mall in New Delhi. The militants were identified as members of a group that is accused in last year's attack on Parliament.