Pakistan's military is denying Indian allegations that Pakistani forces in Kashmir fired their weapons to provide cover for militants.
Indian officials say Pakistani border forces, known as Rangers, were providing cover for Islamist militants attempting to cross into India's part of Kashmir before dawn Wednesday.
Indian officials say the militants retreated back to Pakistan after 30 minutes of fighting, and that at least one Indian soldier was seriously injured.
An Indian border official says New Delhi will lodge a protest with Pakistan over the incident.
But Pakistan insists its forces did not fire their weapons, saying instead that Pakistani troops witnessed Indian forces firing weapons on their side of the Line of Control.
The two countries signed a ceasefire in 2003 that largely ended violence in the region that killed tens of thousands of people since 1989.
Separatist militants oppose Indian rule in Kashmir. Some militants want full independence, while others want Kashmir to merge with Pakistan.
India and Pakistan have fought two wars over Kashmir, and they continue to dispute the boundaries of the Himalayan region.
Some information for this report was provided by AFP and Reuters.