Calling for international intervention at a news conference here on Tuesday, he said that the situation in Kashmir is just the beginning and it will be the first time since the 1962 Cuban crisis that two nuclear-armed countries will be facing off.
"This has the possibility of the unthinkable," he said.
However, he also said that "we can't attack India - that is not an option".
Khan said that the Kashmir situation has repercussions beyond the region as 1.3 billion Muslims were watching and it would lead to Islamic radicalisation, especially if Islamic nations do not act.
After the restrictions are lifted, all the Kashmiris, including those like the state's former Chief Ministers Omar Abdullah and Mehbooba Mufti who were kept on a lockdown, will rise and they have "lost fear of death", he asserted.
Khan offered India lessons in Jawaharlal Nehru's and Mahatma Gandhi's secularism while accusing the Bharatiya Janata Party (BJP) of being "racist and Hindu supremacists".
He called for the implementation of UN Security Council resolutions on Kashmir, but did not say if he would comply with Resolution 47 on a plebiscite that made Pakistan's withdrawal from the territories it occupied in Kashmir a precondition.
Khan accused the international community of putting trade and economic interests above people and ignoring Kashmir because India represented a market of 1.3 billion people.
He also alleged that the world was ignoring the plight of the people of Kashmir because they were Muslims. If eight million Europeans or Jews or even eight Americans were kept under a "lockdown" for 50 days, would the situation be the same? he asked.
After 9/11, "Islamic terrorism" became an excuse to discriminate against Muslims and Indian Prime Minister Narendra Modi was hoping that he could get away by invoking it, Khan claimed.
International leaders and the UN should at least ask the Indian government to lift the curfew, he added.
When asked about the possibility of talks with Modi, Khan said that his Indian counterpart had refused his offers of discussion before August 5 the day India revoked Article 370 and it was not possible now.
He laid down two pre-conditions for a dialogue: lift what he said was the "curfew" in Kashmir and reinstate Kashmir's special status under Article 370 of the Indian Constitution.
India, he said, was trying to bankrupt his country by referring it to Financial Action Task Force, which monitors terrorism funding.
The media in the West was backing him, Khan said, adding that he had received a favourable response from it.
It would build public pressure on Kashmir, where the governments have failed, he added.
(Arul Louis can be contacted at arul.l@.in and followed on Twitter @arulouis)
( With inputs from IANS )