One Indian and five Pakistani soldiers were killed along the line of control in the Poonch district of the disputed Kashmir in a fresh exchanges of fire.
"Pakistani troops resorted to unprovoked firing on Indian positions to which our soldiers responded to effectively," a senior Indian defence official said. "Intermittent fire is still ongoing".
The firing came as New Delhi ruled out talks with Pakistan until it changed its attitude to cross-border terrorism.
"Where is the question of dialogue, when there is no change of attitude," Foreign Minister Mr Jaswant Singh said after a meeting of the Indian security cabinet that reviewed the weekend's South Asian regional summit in Nepal.
"So far as Pakistan's attitude and approach towards terrorism is concerned . . . regrettably there is no change," Mr Singh said.
He accused Pakistan of double standards in addressing international terrorism and the activities of Muslim militant groups operating in Indian Kashmir.
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Indian Defence Minister Mr George Fernandes said today there was no change in the border situation in Kashmir following a South Asian regional summit in Nepal during the weekend. There has not been any qualitative change in the situation, Mr Fernandes said.
Asked whether India had any plans to reduce its number of soldiers on the frontlines, Mr Fernandes replied: "The troops are in the frontlines and bunkers and they will remain where they are".
Several people have been killed in daily firefights in Kashmir since tensions flared after the December 13th suicide attack on India's parliament, which New Delhi blamed on Pakistan-based Islamic militants fighting its rule in Kashmir.