NEW DELHI -- Indian Prime Minister Atal Behari Vajpayee sought to ease public concerns Tuesday that the country was heading for a national crisis over spiraling sectarian tensions.

"People say that everything is going topsy-turvy and the end is near. There is no reason to be so jittery as we have faced similar situations in the past," Vajpayee said during an official function at his residence.

India is still reeling from the worst outbreak of Hindu-Muslim violence for nearly a decade. Nearly 700 people were killed in clashes in the western state of Gujarat earlier this month. And the country faces further trouble with a looming showdown between Hindus, Muslims and the security forces over a hotly disputed religious site in the northern town of Ayodhya, AFP reported.

While acknowledging the problems, Vajpayee said they marked a "transitional phase" in India's long history.

"It is necessary that whatever problems we have in the country, efforts should be made to resolve them peacefully through talks," he said, while appealing to political parties not to extract political mileage out of sensitive issues of critical national importance.

Vajpayee said an official inquiry has been ordered into the sectarian violence in Gujarat and expressed confidence that the investigation would show who was behind the riots.

The current crisis has come just one month after Vajpayee's Hindu Nationalist BJP Party suffered a humiliating defeat in crucial state polls.

Vajpayee admitted that the election results showed people were not happy with his government, but stressed that India was strong and its borders secure from enemy nations.

"People have punished us for our mistakes and expect us to learn and remove these shortcomings," he added.