There is no question of war, he said in reply to a question at a news conference at Rajbhawan here.
Mr Vajpayee said the tension along the border has eased but ruled out the withdrawal of troops from the borders at the moment.
Asked about apprehensions that neither the infiltration nor cross-border terrorism had stopped, Mr Vajpayee said he shared such apprehensions.
But, he said Pakistan was tied to its assurance to halt cross-border terrorism and hoped international pressure would continue to be mounted on it to implement its promises.
The Prime Minister also ruled out any dialogue with Pakistan until the latter stopped aiding and abetting cross-border terrorism and infiltration.
He also said the possibility of imposing central rule in Jammu and Kashmir was under the governments consideration to ensure free and fair assembly elections.
Declaring that he is considering appointing a deputy to himself, Mr Vajpayee said he would be making major changes in his Cabinet, shifting some important BJP ministers to the organisation and inducting NDA constituents like Trinamool Congress and PMK.
A proposal for a deputy Prime Minister has come. It is being considered. Consultations with NDA allies are on and a decision will be taken soon, the Prime Minister said in reply to a question.
There have been reports that home minister LK Advani may be elevated as deputy Prime Minister in the July 1 expansion and reshuffle.