India Wednesday lodged a protest with Pakistan against the alleged intrusion of Pakistani troopers into India-administered Kashmir, the killing of two Indian soldiers and the mutilation of one of their bodies.
The Pakistani military denied the allegations.
Pakistan's High Commissioner to India Salman Bashir was summoned to the Ministry of External Affairs in New Delhi, Indian Foreign Minister Salman Khurshid said.
A group of Pakistan Army soldiers intruded across the 740-kilometre Line of Control (LOC) that divides India- and Pakistan-administered Kashmir Tuesday, the Indian Army said.
Two Indian troopers died in an exchange of gunfire, and one of their bodies was found decapitated, NDTV news channel reported citing army sources.
"We have conveyed it is unacceptable," Khurshid said. "Our intent, our anxiety has been conveyed very clearly and we now expect an appropriate response from the other side.
"We must not and cannot allow an escalation of what was a very unwholesome event that has taken place and we hope that message has gone home."
The minister said violations of the ceasefire could derail efforts to improve bilateral relations.
"Pakistan Army's action is highly provocative," Indian Defence Minister AK Antony said. "The way they treated the dead body of the soldiers, the Indian soldiers, is inhuman."
A Pakistani military official denied that its troops had violated the ceasefire.
"It looks like Indian propaganda to divert attention from Sunday's raid on a Pakistani post by Indian troops in which a Pakistani soldier was killed," the official said.
Pakistan accused Indian troops of attacking one of its outposts Sunday in the Haji Pir sector and injuring two soldiers, one of whom later died.
The Foreign Ministry summoned India's Deputy High Commissioner Gopal Bagley in Islamabad Monday to complain that Indian soldiers had attacked a Pakistani checkpoint on Sunday.
"The Indian government was strongly urged to take appropriate measures to avoid recurrence of such incidents in future," the ministry said.
India denied that its troops had crossed the LOC or violated the ceasefire.
Periodic skirmishes have been reported along the LOC since the two South Asian rivals signed a ceasefire in Kashmir in late 2003. The latest incidents occurred after a recent improvement in relations.
They have fought over the Kashmir region since their independence in 1947 from British rule. Both countries claim the region, and each controls parts of it.
The two sides have been engaged in a dialogue to resolve differences, including the border. They have adopted several measures to improve relations over the past year, including easing trade and visa restrictions and a recent series of cricket matches.