Kashmir has been a flashpoint for more than 60 years
Pakistan has summoned India's envoy to protest against Thursday's killing of one of its soldiers in the disputed territory of Kashmir.
It has also suspended one of the bus services that link India and Pakistani-administered Kashmir.
Two Indian and two Pakistani soldiers have been killed in the last week near the Line of Control dividing Kashmir.
On Friday, India's defence minister also said ceasefire violations had become a "matter of serious concern".
"This kind of occasional ceasefire violations and firing is a serious concern, because even though violence level in Kashmir has come down compared to the past, infiltration attempts are increasing," AK Antony told the Press Trust of India news agency.
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Kashmir dispute
- Claimed by both India and Pakistan; de facto partitioned when ceasefire line agreed in January 1949
- Jammu and Kashmir is the only Indian state with a Muslim majority (60%)
- Sparked wars between India and Pakistan in 1947-48 and 1965
- Third conflict in 1999, when Pakistani-backed forces infiltrated Indian-controlled territory in the Kargil area
- Armed revolt against Indian rule erupted in 1989, since when thousands have been killed
- Fears it could trigger a nuclear conflict, as Pakistan and India both declared themselves nuclear powers in 1998
- Ceasefire across Line of Control (LoC) agreed in 2003
He said India was "closely monitoring" developments and its troops were "on alert".
Claimed by both countries, Kashmir has been a flashpoint for over 60 years. Exchanges in the disputed area are not uncommon but rarely result in fatalities.
'Unprovoked' firing
Correspondents say the Pakistani and Indian governments have been trying to strike a balance between appearing firm and de-escalating tensions.
But this recent spate of skirmishes has plunged the uneasy neighbours into what could be the worst crisis in relations since the Mumbai attacks of 2008.
On Friday morning, India's army said there had been a fresh exchange of fire with Pakistani troops but no casualties were reported.
It came a day after Pakistan said one of its soldiers had been killed by "unprovoked" firing by Indian troops in the Battal sector of Kashmir.
Two Indian newspapers have suggested that the Indian army may have provoked the recent clashes.
The reports say Indian commanders breached a ceasefire accord by ordering new observation posts on the Line of Control after a 70-year-old woman crossed it unhindered last year.
After a series of isolated incidents, a Pakistani soldier was killed on 6 January in a border skirmish. Then two Indian soldiers were killed in an alleged Pakistani border attack days later. Indian officials said one of the soldiers was beheaded.
Pakistan denies Indian accounts of what happened, and the Indian army has denied any provocative actions.
India suspended a peace process with Pakistan following attacks by Pakistan-based militants in Mumbai in 2008. Negotiations resumed in February last year.
Thousands of people have been killed in Indian-administered Kashmir since an armed revolt against Indian rule erupted in 1989. There has been a ceasefire in Kashmir since late 2003.
Last month, India and Pakistan signed an agreement to ease visa restrictions on travel for some citizens.
