A Pakistani military official, who did not want to be named, denied an "Indian allegation of unprovoked firing" along the LoC.
The official added: "It looks like Indian propaganda to divert the attention of the world from Sunday's raid on a Pakistani post by Indian troops in which a Pakistani soldier was killed".
The official said authorities had checked with commanders on the ground and ascertained that Pakistani forces had not crossed the LoC or carried out any raid.
"These are baseless allegations," he claimed.
The Indian Defence Ministry described the killing of the two soldiers by Pakistani forces as a "provocative action" and said New Delhi would take up the issue with Islamabad.
"The government of India considers the incident as a provocative action and we condemn it. Directors General of Military Operations of the two countries are in touch over it," the Defence Ministry said in a statement.
"The government will take up the incident with Pakistan government. We expect Islamabad to honour the ceasefire agreement strictly," the statement said.
In what was described as a "provocative" attack by India, Pakistani soldiers crossed into Indian territory in Poonch sector of Jammu and Kashmir and ambushed an Indian patrol killing two soldiers, one of whom was decapitated.
Reports said Pakistani troops entered about 100 metres into Indian territory and ambushed an Indian Army patrol.
Two more soldiers were injured in the attack that occurred along the LoC in Poonch district.
Yesterday, Pakistan's Foreign Office called in the Indian Deputy High Commissioner to protest over what it described as an "unprovoked Indian attack" on one of its military posts along the LoC on Sunday.
Foreign Office spokesman Moazzam Khan said the incident had resulted in the death of a Pakistani soldier and injuries to another.
He said the Indian government was urged "to take appropriate measures to avoid recurrence of such incidents".
India and Pakistan put in place a ceasefire along the LoC in late 2003.
The truce has, by and large, held for the past nine years though there was a spurt in violations during 2012.
The two latest incidents were among the rare ceasefire violations in which lives were lost.
Islamabad: The Pakistani military on Tuesday rejected the Indian Army's contention that Pakistani troops had killed two Indian soldiers after crossing the Line of Control, saying the accusation was aimed at diverting attention from another incident over the weekend.
First Published: Tuesday, January 08, 2013, 22:41