Five Indian soldiers have been shot dead in Indian-administered Jammu and Kashmir, the chief minister of the disputed region says.
India's army accused Pakistan over the incident, saying troops had "entered the Indian area and ambushed" an army patrol in the Poonch area.
A Pakistani military official told the BBC that "no fire took place" from their side.
Claimed by both countries, Kashmir has been a flashpoint for over 60 years.
In January, several deadly cross-border attacks plunged the neighbours into the worst crisis in relations in years.
The latest incident comes as the two sides are preparing for peace talks, the first since a new Pakistani government took office.
The chief minister of Jammu and Kashmir state, Omar Abdullah, said such incidents "don't help efforts to normalise or even improve relations with Pakistan and call in to question the Pakistan government's recent overtures".
Indian Defence Minister AK Antony told the parliament that the government "has lodged a strong protest with the government of Pakistan through diplomatic channels".
A top Indian army officer told the BBC that a group of "elite commandos" from the Pakistani army had breached the line of control on Tuesday morning and ambushed an Indian army patrol in the Poonch sector of Jammu region.
The officer said one Indian soldier was injured in "unprovoked firing" by Pakistani soldiers in a separate incident in Udhampur region on Monday.
A Pakistani military official described the Indian allegations as "baseless" and said there was no firing from the Pakistani side.
India and Pakistan agreed a ceasefire along the line of control, which divides the region, in November 2003.
But both sides have blamed each other for occasional cross-border fire, as a result of which several soldiers and civilians have been killed or wounded on both sides.
After the January incidents - three Pakistani and two Indian soldiers were killed in hostile exchanges between troops stationed along the line of control - relations between the sides deteriorated so sharply that there were fears that the fledgling peace process under way since February last year could unravel.
An Indian defence ministry statement released on Tuesday said that the number of "hardcore Pakistan-trained terrorists" who had attempted to infiltrate the line of control had doubled this year in comparison to the corresponding period of 2012.
The statement said that there had been 57 ceasefire violations by the Pakistani army this year - "which is almost 80% more than the violations last year".
Although both sides denied provoking the clashes along the border earlier this year, they also agreed to de-escalate tensions.
Thousands of people have been killed in Indian-administered Kashmir since an armed revolt against Indian rule erupted in 1989.