Pakistani and Indian troops exchanged fire Sunday along their disputed border in divided Kashmir, with each side blaming the other for the flare-up and Pakistan saying one of its soldiers was killed.

Pakistan said Indian troops crossed the de facto border known as the Line of Control and stormed a military post, an accusation denied by the other side.

A Pakistani military statement said the Indian troops came across the frontier in the Haji Pir sector, 80 kilometres (49 miles) north of Islamabad, and "physically raided" a checkpost named Sawan Patra.

"Pakistan Army troops effectively responded to the attack successfully. One Pakistani soldier embraced martyrdom while another was critically injured," it said in a statement.

The Indian troops retreated, leaving behind a gun and a dagger, it said.

An Indian army spokesman in Srinagar, the summer capital of the Indian-administered part of Kashmir, denied its troops crossed the border.

Colonel Brijesh Pandey accused the Pakistani military of firing mortar bombs into a village in the Uri district in Indian Kashmir, which faces Haji Pir in the Pakistani sector of the territory.

"At 3:15 am today (2145 GMT Saturday) Pakistani troops resorted to heavy mortar firing, targeting a village in Uri sector," Pandey told AFP, adding that the homes of some villagers were damaged.

"We retaliated with small arms and the exchange continued for over an hour," the spokesman said.

He said no Indian troops were hurt but had no information about any Pakistani casualties.

Muslim-majority Kashmir is a Himalayan region which India and Pakistan both claim in full but rule in part. It was the cause of two of their three wars since independence from Britain in 1947.

The nuclear-armed neighbours have observed a ceasefire in Kashmir since November 2003, but there have been occasional clashes and accusations of truce violations from both sides.

Last month officials in Pakistani-administered Kashmir said cross-border fire from Indian troops killed a man and wounded three other civilians in two villages.

According to an official Indian report cited by the Press Trust of India, there were 71 firing incidents along the Line of Control in 2012 in which four Indian soldiers, two Indian civilians and one alleged Pakistani infiltrator were killed.

Fifteen others were injured, according to the report from the Kashmir state home ministry.

The latest clash occurred as the two countries wrapped up their first bilateral cricket series for five years.

Cricket has been used in the past to mend ties, but analysts have said the prospect of a diplomatic dividend this time appeared slim.

India suspended its peace process with Pakistan after deadly attacks by Pakistan-based militants in 2008 in Mumbai. Talks only resumed in February last year.

Both sides remain deadlocked over Kashmir but have made some progress on less contentious subjects such as trade.