The Indian army has vowed to avenge the killing of three of its soldiers in the disputed Kashmir region as tensions keep rising with Pakistan.
Militants from across the border had ambushed Indian troops and mutilated the body of one soldier, the army said.
Pakistan says at least eight civilians on its side of the de facto border were killed on Wednesday morning when an Indian shell hit a passenger bus.
Both countries accuse each other of violating a 2003 Kashmir truce accord.
Dozens of civilians and soldiers on both sides have been killed since militants attacked an Indian army base in September.
An Indian army officer told the Press Trust of India news agency that a “counter-infiltration patrol party of Indian army was ambushed by terrorists ahead of the fencing along the Line of Control in the forest belt in Machil sector in Kupwara district” on Tuesday.
The Pakistani foreign ministry denied the claim.
“Retribution will be heavy for this cowardly act,” Indian army spokesperson Col Rajesh Kalia said.
Following the attack, there was heavy firing and shelling by both sides along the LoC.
Pakistani authorities said at least eight people were killed when a passenger van came under fire from the Indian side in the Neelum valley region. A number of other people in the bus were injured.
Both India and Pakistan claim Muslim-majority Kashmir in its entirety but control only parts of it.
The territorial dispute between the two countries has been running for over six decades, and two out of the three wars fought between the nuclear-armed rivals have been over Kashmir.
As with every stand-off in Kashmir, the fear of many is that this could eventually escalate into a major clash between two nuclear-armed states.
But most analysts still believe that is unlikely to happen and that sporadic clashes and diplomatic sabre-rattling are likely to continue.
Two weeks after the 18 September army base attack at Uri on the Indian-administered side, the Indian military said it had carried out “surgical strikes” against suspected militants along the Line of Control (LoC), the de facto border that divides Kashmir.
Pakistan called the strikes an “illusion” and denied Indian claims it was behind the militant attack.
A subsequent BBC investigation found that while India did not airdrop commandos to hit militant camps or conduct ground assaults deep into Pakistani-administered territory, troops did cross the LoC a significant distance to hit border posts and then pulled back.
Pakistan said two soldiers were killed in the strikes. At least nine more Pakistani soldiers are reported to have died in cross-border firing in the last three months – seven of them in Indian shelling last week.
That is thought to be the country’s biggest single loss of life in Kashmir since the truce.
Narendra Modi’s BJP government swept to power promising a tough line on Pakistan, so it has been been under tremendous pressure to retaliate after the Uri base attack. The raid was the deadliest of its kind for years.
“I assure the nation that those behind this despicable attack will not go unpunished,” Mr Modi declared just hours after the base was attacked.
There was also much talk of whether India should continue with its doctrine of “strategic restraint” against Pakistan.
Many observers say Mr Modi feels he has to placate an angry domestic constituency and send out a message that he is a strong leader.
Islamabad says India’s stance is a “blatant attempt” to deflect attention from human rights abuses in the region.
More than 80 people, nearly all anti-government protesters, have died in months of violence against Indian rule.