The Pakistani military said in a statement on Thursday that its troops returned fire, killing five Indian soldiers and damaging their bunkers.
"In efforts to divert attention from precarious situation in IOJ&K (Indian-held Kashmir), Indian Army increases firing along LOC. 3 Pakistani soldiers embraced shahadat (martyrdom). Pakistan Army responded effectively," the statement read, Presstv Reported.
"5 Indian soldiers killed, many injured, bunkers damaged. Intermittent exchange of fire continues," it added.
Major General Asif Ghafoor, spokesman of Pakistan's armed forces, also tweeted that its three soldiers had died along with five Indian troops along the contested border.
"Intermittent exchange of fire continues," Ghafoor said.
An Indian army spokesman denied any casualties. "No casualties. This assertion is wrong," the spokesman said.
In a statement, the Indian army said that from around 0700 local time, Pakistan violated a ceasefire between the two nations.
Separately, Pakistani officials said two civilians died when mortars fired by India hit a village in Poonch town. They said intermittent exchanges of fire between the two sides had been going on since morning.
Pakistan’s army chief earlier said the country’s military would “go to any extent” to support people in the disputed Himalayan valley.
The flare-up comes during a period of high friction between the nuclear-armed neighbors, after India scrapped special status for the portion of Muslim-majority Kashmir it controls, angering Pakistan which also has claims on the region.
Pakistan formally asked the United Nations Security Council late Tuesday to hold an emergency session to address the situation.
"Pakistan will not provoke a conflict. But India should not mistake our restraint for weakness," Foreign Minister Shah Mahmood Qureshi wrote in a letter to the council . "If India chooses to resort again to the use of force, Pakistan will be obliged to respond, in self-defense, with all its capabilities."
Islamabad has also expelled the Indian ambassador, halted bilateral trade and suspended cross-border transport services. However, analysts said the actions were unlikely to move New Delhi.
UN Security Council to discuss Kashmir Friday
Diplomatic sources said the 15-member Security Council is scheduled to discuss India's move to strip Kashmir of its autonomy at a meeting behind closed doors on Friday
Poland, which currently holds the council's rotating presidency, has listed the matter for discussion at 10:00 am (1400 GMT) Friday,
The meeting comes at the request of China and Pakistan to discuss India's decision to revoke the special status of Jammu and Kashmir.
Any action by the council is unlikely as the United States traditionally backs India and China supports Pakistan.
UN Secretary-General Antonio Guterres has already called on India and Pakistan to refrain from any steps that could affect the special status of the disputed region.
Guterres also said he was concerned about reports of restrictions on the Indian side of Kashmir.
In 1948 and in the 1950s, the UN Security Council adopted several resolutions on the dispute, including one which says a plebiscite should be held to determine the future of the mostly Muslim Kashmir.
Another resolution calls upon both sides to "refrain from making any statements and from doing or causing to be done or permitting any acts which might aggravate the situation."
UN peacekeepers have been deployed since 1949 to observe a ceasefire between India and Pakistan in Jammu and Kashmir.
The Indian Home Ministry recently said in a Twitter post that the ongoing restrictions “were being eased out in a phased manner” in the valley.
Kashmir has been divided between India and Pakistan since their partition and independence from Britain in 1947. The disputed region is claimed in full by both sides, which have fought three wars over it.
India regularly accuses Pakistan of arming and training militants and allowing them across the restive frontier in an attempt to launch attacks. Pakistan strongly denies the allegation.
Earlier this year, Pakistan and India came close to an all-out conflict yet again, after a militant attack in Indian-controlled Kashmir in February was claimed by a group based in Pakistan, igniting tit-for-tat airstrikes.