Here are the latest developments:
Two women were killed last night and 17 more civilians were injured as Pakistani troops targeted over 60 Indian outposts and three dozen villages with heavy mortar shelling and firing overnight along the 200-km International Border in Jammu and Kashmir.
The Border Security Force said three of their personnel were also injured in unprovoked firing by Pakistan Rangers at their posts all night.
Indian officers said their soldiers gave a "strong and befitting reply". India, say sources, targeted 73 Pakistani posts with mortars and small arms.
"No dialogue under duress, we won't succumb to blackmail," government sources said today. Pakistan has reportedly been told that ceasefire violations and talks cannot go hand-in-hand.
Pakistan asked for a flag meeting last night but India did not respond. Indian forces have been told to reject any offer of talks at the border until all firing across the International Border and the 700-km Line of Control or de facto border between the two countries stops.
More than 20,000 residents have fled their homes to escape the shelling that has damaged houses and ripped power cables and electricity transformers. Thousands have signed in at government shelters and many are staying with friends or relatives.
Hostilities spiked on Monday when five villagers were killed and 34 injured in Arnia in one of the worst violations by Pakistan of the 2003 ceasefire between the two countries.
On Tuesday, Home Minister Rajnath Singh, in a stern warning, said, "Pakistan should think twice before indulging in any ceasefire violation as the government is being headed by Narendra Modi."
Senior military officials of India and Pakistan talked over the hotline for five minutes yesterday. Both sides accused each other of violating the ceasefire, Army sources said in Delhi.
India has accused Pakistan of firing to distract its forces and help militants infiltrate into Kashmir. Indian army sources tell NDTV they believe nearly 700 militants are waiting to cross into the Kashmir Valley from across the border.