The soldier was shot in the leg on Sunday several miles from the village of Chaukothi, at the cease-fire line dividing Kashmir between Pakistan and India, officials said.
India denied responsibility for the attack, and accused Pakistan of firing two rockets into another town near the line that divides Indian- and Pakistani-controlled Kashmir.
But Secretary Powell said that infiltration across the line that divides Kashmir had declined since the general's speech disavowing militants.
The United Nations brokered a peace agreement in 1949, dividing Kashmir along a cease-fire line that has roughly held until today.
Nor does he consider the "Line of Control" that has divided Kashmir between India and Pakistan for decades to be a meaningful boundary.
"The Line of Control does not divide Kashmir into two legal parts."
The Indian Army has several divisions deployed along the line that divides Kashmir, and every day, Indian officials say, their soldiers kill some infiltrators.
He had come to Muzaffarabad more than 50 years ago, after the first war to divide Kashmir, leaving practically all his relations on the other side.
A ceasefire was reached in 1949 and a Line of Control was established, dividing Kashmir between the two countries.
The countries began to fight, and a cease-fire divided Kashmir in two.