Here are the latest developments:
Sources say Pakistan used mobile mortars, or mortars mounted on armoured personnel carriers, which allow troops to fire from one location and move quickly to the next.
Pakistan started firing at Indian outposts with mortars and automatic weapons at about 9.15 pm on Wednesday from Kanachak in Jammu. There was shelling in over 80 villages in Jammu, Samba and Kathua districts, according to the Press Trust of India.
Indian soldiers retaliated aggressively from around 60 posts. Firing is still on in several sectors in Jammu.
Top government sources say the forces have been given a free hand to deal with the spurt in firing and shelling by Pakistani troops, in which eight civilians have been killed and nearly 60 injured this week.
India has warned Pakistan that it is not afraid of escalating fire and said there can be no talks at the border until all firing across the International Border and the 700-km Line of Control - the de facto border - stops.
The Prime Minister's comments yesterday were seen as a response to critics who have accused him of focusing more on campaigning for next week's polls in Maharashtra and Haryana than the border crisis.
Sources in the government tell NDTV that PM Modi "has left the management of the crisis to his team led by the National Security Adviser after indicating broad guidelines about not succumbing to any blackmail and responding appropriately."
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, two women were killed and 20 people were injured in firing through the night.
More than 20,000 villagers have fled their homes near the border to escape the shelling that has damaged houses and ripped power cables.
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.