Four rebels and an army trooper have been killed near the de facto border in India-administered Kashmir, Indian defence officials said.
The rebels, who remain unidentified, were killed in Kundanar area of Kupwara district near Line of Control (LoC), 150km north of summer capital, Srinagar.
"Due to spurt in infiltration army has stepped up counter-infiltration operations. One search operation resulted in contact and exchange of fire between army and terrorists on Saturday evening that resulted in the death of one soldier," an army spokesman told Al Jazeera on Sunday.
Officials said the soldier Naik Neeraj Kumar succumbed to his injuries in the night-long gun battle which is still going on.
The gun battle comes as armies of Pakistan and India are trading intermittent fire in the southern portion of the disputed region.
On Sunday a civilian was injured when Indian soldiers targeted a Pakistani post in Jarwal sector near the Sialkot working boundary, the Dawn newspaper reported.
India on Saturday accused Pakistani troops of targeting three villages in India-administered Kashmir, killing at least two members of one family, while Pakistan said that two of its civilians were also killed in "unprovoked" India fire.
Both countries have accused each other of violating the 2003 ceasefire more than 20 times in a month in the Himalayan region ruled by both countries in portions and disputed since 1947.
More than a dozen rebel groups seeking independence from India or merger of the territory with Pakistan are engaging the Indian soldiers in asymmetric guerrilla warfare since 1989.
The disputed region is one of the world's most militarised zones, with India deploying nearly a million troops to quell the rebellion.
Last week New Delhi called off high-level talks with Pakistan, scheduled to take place in Islamabad, angry that Pakistani officials had met with Kashmiri pro-Independence leaders in New Delhi.
Pakistan has, meanwhile, called for the meeting of Directors General of Military Operations (DGMOs) of Pakistan and India to solve the ongoing border skirmishes.
"DGMOs of both countries should meet immediately and discuss ways and means to stop the current spate of firing along the working boundary and Pakistan is also sending a proposal to India for the meeting," Pakistan's Adviser on National Security and Foreign Affairs, Sartaj Aziz, told the Dawn.
On Sunday India's paramilitary, Border Security Force (BSF), Director General D K Pathak said Pakistan's shelling has affected around 25 Indian posts and in response "BSF is heavily retaliating".
"Our intensity of fire is more than them [Pakistani troops]. Our volume of fire is more and our target is more effective than them," the Reuters news agency quoted Pathak as saying.