Indian troops entered Pakistan-controlled Kashmir to carry out strikes against militant units, officials confirmed on Thursday, as border states went on high alert and tensions ratcheted up ever higher in the disputed region.

While firing around the border area by Indian and Pakistani troops is common, it is rare for either side to publicly reveal the details of cross-border operations.

Pakistan had denied what India described as "surgical strikes" and said instead that two of its soldiers were killed and nine injured in unprovoked firing by India across the Line of Control (LoC) in Kashmir.

The LoC is the disputed military frontier that has divided the Himalayan region into parts administered by either India or Pakistan since the two countries became independent in the late 1940s.

Thursday's claims and counter-claims come 10 days after troubled relations between the two countries worsened further when 18 Indian soldiers were killed in a militant attack on an Indian Army base in Uri in Jammu and Kashmir state.

India said the attackers came from Pakistan.

The Indian Army had conducted the strikes to neutralise terrorists who had gathered along the LoC, India's director general of military operations, Lieutenant General Ranbir Singh, said.

"During these counter-terrorist operations significant casualties have been inflicted on the terrorists and those trying to support them," Singh said at a briefing in New Delhi.

Later, an Indian government official said several teams of Indian commandos had crossed the LoC on foot after midnight and attacked at least six bases where the militants had grouped.

It was not clear how many casualties there were among the militants or Pakistan Army soldiers, who Indian intelligence claims support the militants by firing artillery across the LoC. The dead could go into double digits, the source said on condition of anonymity.

No Indian soldiers were hurt in the four-hour operation, the source said.

The Pakistan Army denied the ground attack and said Indian troops fired across the LoC into the areas of Bhimber, Kel, Tatta Pani and Lipa shortly after midnight.

"The notion of surgical strike linked to alleged terrorists bases is an illusion being deliberately generated by India," Pakistan Army spokesman General Asim Bajwa said, adding that it was an attempt to create media hype.

Pakistan Prime Minister Nawaz Sharif condemned the "unprovoked firing" across the border by Indian troops and called it naked aggression.

"Our intent for a peaceful neighbourhood should not be mistaken as our weakness," Sharif said in a statement in Islamabad. "Our valiant forces are fully capable of defending the
territorial integrity of the country."

India's Singh said that the operations "to neutralise the terrorists" had ceased and there were no plans of continuing the operations. "However, the Indian armed forces are fully prepared for any contingency that may arise."

Singh said he had talked to his Pakistan counterpart immediately after the operation.

Four Indian states bordering Pakistan - Jammu and Kashmir, Punjab, Rajasthan and Gujarat - were on high alert and villages along the border in Punjab state were being evacuated, a Home Ministry official said.

The Beating the Retreat ceremony that takes place at two border posts in Punjab had been suspended until further notice.

The latest spat over Kashmir has had regional implications as several countries joined India in withdrawing from a key South Asia summit scheduled to be held in Islamabad in November.

An estimated 100 people, mostly civilians, have died on both sides in border skirmishes since early 2013.

Both New Delhi and Islamabad accuse each other's troops of violating a 2003 ceasefire agreement.