India and Pakistan traded sharp accusations on Wednesday over recent cross-border attacks in the disputed territory of Kashmir - but the nuclear-armed rivals appeared determined to prevent the tensions from escalating into a full diplomatic crisis.

India accused Pakistani troops of "barbaric and inhuman" behavior for killing and mutilating the bodies of two Indian soldiers after a firefight on Tuesday, and summoned Pakistan's envoy in New Delhi to lodge a protest against the "highly provocative" action.

Pakistan then accused Indian forces of attacking and killing a Pakistani soldier in a cross-border raid on Sunday.

Both nations deny each other's accusations.

Despite several violations of the 2003 ceasefire since the 460-mile Line of Control was put into place, incursions by troops from either side are uncommon, and officials rarely react as strongly and publicly as they have in the past few days.

Retired Indian army Brigadier Gurmeet Kanwal, who previously commanded a brigade on the LoC, said Tuesday's incident - about 650 yards from the de facto border - marked the most serious infiltration since the ceasefire was put in place.

India considers the entire Kashmir region of snow-capped mountains and fertile valleys an integral part of its territory. Muslim Pakistan contests that and demands implementation of a 1948 U.N. Security Council resolution for a plebiscite to determine the wishes of the mostly Muslim people of Kashmir.

'Propaganda'
The body of one of the Indian soldiers was found mutilated in a forested area on the side controlled by India, Rajesh K. Kalia, spokesman for the Indian army's Northern Command, said. However, he denied Indian media reports that one body had been decapitated and another had its throat slit.

"Regular Pakistan troops crossed the Line of Control ... and engaged the Indian troops who were patrolling the sector," India's Ministry of External Affairs said in a statement. "Two Indian soldiers were killed in the attack and their bodies subjected to barbaric and inhuman mutilation."

Pakistan rejected the allegations, saying it had carried out "ground verification" and found that "nothing of this sort happened as being alleged by India," a Pakistani military official said in a statement to NBC News.

The official said India's accusations were "propaganda" aimed at diverting attention from an Indian cross-border raid on Sunday which left one Pakistani soldier dead.

Nuclear-armed India, Pakistan talk peace over lunch

Another Pakistani military official told NBC News that the military had made too much progress working with India in decreasing cross-border infiltration to engage in such a conflict.

"The Indian government is under heavy fire with the rape scandals engulfing that country. They needed a scapegoat and a diversion. The scapegoat is Pakistan and the diversion is such incidents," the official said.

India's foreign minister sought to cool tensions, saying that exhaustive efforts to improve relations could be squandered if the situation was not contained.

"I think it is important in the long term that what has happened should not be escalated," Salman Khurshid told a news conference. "We cannot and must not allow the escalation of any unwholesome event like this."

"We have to be careful that forces ... attempting to derail all the good work that's been done towards normalization (of relations) should not be successful," he added, without elaborating on who such forces might be.

India and Pakistan have fought three wars since their independence in 1947, two of them over the Himalayan region of Kashmir, and both are now nuclear-armed powers.

Away from the border, ties had appeared to be improving of late. Pakistan's cricket team completed a two-week tour of India on Sunday, its first visit in five years.

Reuters contributed to this report.