India's military spokesman Major-General Deepak Sammanwar said that though there were no casualties in the "unprovoked" shelling, the incident had violated the 14-month-old cease-fire between the facing armies.

He said the Indian positions in Durga area near the town of Poonch came under fire from the Pakistani side around 6.30pm local time (1300 GMT) and continued for about ninety minutes.

"Seven to eight rounds were fired but our troops exercised full restraint. We have alerted our patrols for ambushes in the region," he said.

However, Brigadier Dhruv Katoch of the Indian army's 16 Corps, stationed in Jammu region, was quoted by Press Trust of Indian news agency as saying that as many as 15 shells fell on the eastern side of Poonch between 6.30pm and 8pm.

Maj-Gen Sammanwar said Indian troops were "coolly watching the situation", adding that an assessment was being made on why the firing happened.

Ceasefire in force

Likewise Brigadier Katoch said, "At present we would not like to accuse the Pakistan army [of firing] as we have to investigate first whether militants have fired from across the Line of Control."

The Baglihar dam issue has cast a
new shadow over Indo-Pak ties

Indian officials drew attention to the ceasefire that has been in force along the borders in Kashmir since November 2003.

"It's certainly a violation of the ceasefire. We have exercised full restraint," Maj-Gen Samanwar insisted.

There was no immediate reaction to the Indian charge by Pakistan, which had announced earlier on Tuesday it has taken a long-running dispute over a dam India is building on its side of divided Kashmir to the World Bank.

Islamabad warned that the simmering disagreement could hurt efforts to reach a permanent peace between the two nuclear-armed rivals.

Dam dispute

The 450MW Baglihar dam is being constructed by India on the Chenab river in the Doda district of Indian-administered-Kashmir.

"India has inordinately delayed the process  - and pressed ahead with the construction of the dam in violation of the treaty"

Masood Khan,
Pakistan Foreign Ministry spokesman

Pakistan says the dam is a violation of the 1960 Indus Water Treaty brokered by the World Bank. The treaty regulates the sharing of water between the neighbours.

Pakistan's Foreign Ministry spokesman Masood Khan said in Islamabad on Tuesday the decision to request the World Bank to appoint a neutral arbitrator was reached after months of frustration.

"India has inordinately delayed the process ... and pressed ahead with the construction of the dam in violation of the treaty. So we have taken the decision to approach the World Bank," he said.

The bilateral talks on the dispute over the dam project spread over months failed to resolve the differences.
Last week Pakistan had said the talks could resume only if India stopped work on the project.

Indian rejoinder

For its part, India maintains the Indus Water Treaty has not been violated and has deplored Pakistan's decision to involve a third party.

Peace talks have considerably
eased tensions along the border

Navtej Sarna, spokesperson for India's external affairs ministry, said, "In our last rounds of meetings there were signs of convergence on the issue. In fact it had been decided that any outstanding issues would be referred to technical-level talks between the water resources secretaries."

He added, "So this decision to refer it to the World Bank is not justified."

Pakistan, however, has expressed fears that the dam will cut off downstream farmers in the eastern Punjab province, considered the country's food basket.

The Baglihar project is nearing completion and is expected to augment supplies to power-starved north Indian states.

Bloody encounter

Separately on Tuesday, government officials said in Srinagar, the winter capital of Indian-administered-Kashmir, five suspected fighters were gunned down by troops when they tried to sneak into their side of Kashmir from Pakistan.

Over a dozen groups are battling
Indian security forces in Kashmir

"During the night intervening 17 and 18 January, a group of terrorists attempted to infiltrate to own side via Balnoi in Mankote sector of Poonch," a statement issued by Kashmir police said.

"It was challenged by our troops and in the ensuing encounter five terrorists were killed and the operation was still going on when reports last came in."

The statement added that an Indian soldier was killed when separatist fighters detonated an improvised explosive device at Jagiyal, also in Poonch area, on Tuesday.

The officials in Kashmir said they are trying to ascertain if the Indian border posts in Durga area were targeted by the Pakistani troops or separatist fighters in revenge against the killing of their colleagues on Tuesday.

"But even if we presume it were terrorists, even then they could not have done that without the knowledge of the Pakistanis," one of the officials said.