"PAF shot down two Indian aircrafts inside Pakistani airspace", tweeted Major General Asif Ghafoor.
"So far there are no (civilian) casualties but there is panic among people", said Rahul Yadav, the deputy commissioner of the Poonch district on the Indian side where some of the shelling took place.
In another statement, Pakistan's foreign ministry said it had struck "non military targets" but avoided "human loss and collateral damage".
Then, Indian police said that an Indian jet had had crashed in Indian Kashmir, killing two pilots and a civilian. "The Indian air force responded strongly and they were pushed back", the official said.
Indian army soldiers on patrol near the disputed territory of Kashmir.
The incursion over the heavily militarised Line of Control comes a day after Indian warplanes carried out a strike in Pakistan on what New Delhi said was a militant training camp, in retaliation for a February 14 suicide bombing in Kashmir that killed 40 Indian troops.
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On Wednesday, security forces killed two Jaish militants in a gun battle, Indian police said. But while India said a large number of JeM fighters had been killed, Pakistani officials said the Indian airstrike was a failure and inflicted no casualties.
There is some dispute about what actually happened during the strike: while New Delhi says the attacks hit their mark, Islamabad claims the warplanes were quickly forced to retreat and fired wide of their targets.
"On February 27, flights to/from Lahore, Multan and Islamabad are cancelled and all passengers will be transferred to next available flights when the airspace is open again", the statement says.
China on Tuesday also urged India and Pakistan to "exercise restraint" and asked New Delhi to carry out its fight against terrorism through global cooperation, hours after Indian fighter jets struck Jaish-e-Mohammed's biggest camp in Pakistan in a pre-dawn attack.
In New Delhi, India's External Affairs Minister Sushma Swaraj said Wednesday her country does not wished to see further escalation of the situation with Pakistan and that it will continue to act with responsibility and restraint. "The limited objective of the pre-emptive strike was to act decisively against the terrorist infrastructure of the JeM in order to pre-empt another terrorist attack in India".
U.S. Secretary of State Mike Pompeo arrives at Noi Bai International Airport in Hanoi, Vietnam, Tuesday, Feb. 26, 2019, for a second summit between U.S. President Donald Trump and North Korean leader Kim Jong Un.
He said the global community is following the developments closely.