Indian and Pakistani troops have clashed near the Line of Control in the disputed Kashmir region.
Pakistan said Indian troops had raided a military post in the Haji Pir sector of Pakistani-administered Kashmir, killing a soldier and injuring another.
An Indian army spokesman said it had responded to a "ceasefire violation" but did not cross the Line of Control.
Kashmir is claimed by both nations in its entirety and has been a flashpoint between them for more than 60 years.
Exchanges are not uncommon but rarely result in fatalities.
The Pakistani military said in a statement that Indian troops had "physically raided a checkpost named Sawan Patra".
The Haji Pir Pass is just south of the main road from Muzaffarabad in Pakistan-controlled Kashmir to Srinagar in Indian-administered Kashmir.
"Pakistan army troops effectively responded to the attack," the Pakistani statement said, adding that Indian troops had left behind weapons as they retreated.
One Pakistani soldier was killed and another critically injured, it said.
Indian army spokesman Col Jagadish Dahiya told Reuters news agency it had responded to a "ceasefire violation" by Pakistan.
He added: "None of our troops crossed the Line of Control. We have no casualties or injuries."
Another Indian army spokesman, Col Brijesh Pandey, told Associated Press that Pakistani troops had "initiated unprovoked firing" with mortar shells and automatic weapons at Indian military posts. One civilian home was destroyed, he said.
"We retaliated only using small arms. We believe it was clearly an attempt on their part to facilitate infiltration of militants," Col Pandey said.
There has been a ceasefire in Kashmir since late 2003.
India suspended a peace process with Pakistan following attacks by Pakistan-based militants in Mumbai in 2008. Negotiations resumed in February last year.
Last month, the nations signed an agreement to ease visa restrictions on travel for some citizens.