India has rebuked Pakistan over the alleged killing of two soldiers in the disputed territory of Kashmir but has warned against escalation of the dispute in the flashpoint region.
India summoned Pakistan's top envoy in Delhi to express its outrage.
Pakistan has denied the killings and an Indian claim that its soldiers crossed the dividing Line of Control (LoC).
India and Pakistan both claim Kashmir in its entirety and have fought two wars over the territory in 60 years.
India had conveyed its anxiety "very clearly" to the Pakistani high commissioner when he was summoned to the foreign ministry in Delhi, said External Affairs Minister Salman Khurshid.
"We cannot and must not allow escalation of this very unwholesome event that has taken place," Mr Khurshid said.
India called the attack on Tuesday "barbaric", saying one of the two soldiers had been beheaded and the body of the other was mutilated in an unspecified fashion.
It blamed the Pakistani army, rather than Pakistan-backed militants, for the attack.
Pakistan says India's allegations are "baseless" and that "nothing of the sort" took place.
India says one of its patrols was attacked by Pakistani troops near the LoC, 500m (550 yards) inside Indian territory.
But Pakistan rejected the Indian accusation as "propaganda", saying it was an attempt to draw attention away from an Indian incursion two days earlier in which a Pakistani soldier was killed.
The BBC's Andrew North, in Delhi, says the Indian government is now under domestic pressure to take a tough line.
However, its options are limited if it wants to avoid further escalation, our correspondent explains.
Exchanges in the disputed area are not uncommon but rarely result in fatalities.
There has been a ceasefire in Kashmir since late 2003.
Peace negotiations resumed last February after a four-year break following attacks by Pakistan-based militants in Mumbai in 2008.
Thousands of people have been killed in Indian-administered Kashmir since an armed revolt against Indian rule erupted in 1989.