Pakistan says it has shot down two Indian Air Force jets in a major escalation of the Kashmir conflict.
An army spokesman said one of the planes had fallen inside Pakistan and a pilot had been arrested. There is no confirmation from India which claimed to have shot down a Pakistani aircraft.
Pakistan earlier said it had hit Indian targets, a day after India struck militants in Pakistan.
The raids follow a militant attack in Kashmir which killed 40 Indian troops.
Also on Wednesday, Pakistan’s foreign ministry said Pakistani jets had launched air strikes across the Line of Control (LoC) dividing Pakistani- and Indian-controlled Kashmir.
Pakistan said it had “taken strikes at [a] non-military target, avoiding human loss and collateral damage”.
Indian authorities said the Pakistani jets had been pushed back.
India has also reportedly announced restrictions on its airspace. The Vistara airline said flights in the region were being suspended.
The aerial attacks across the LoC are the first since a war between the two countries in 1971.
Troops have also been shelling across the LoC. Four Pakistani civilians were killed and 10 others were injured in cross-border shelling on Tuesday.
On the Indian side, five soldiers were also injured in the firing, officials told the BBC. Schools in at least two districts along the LoC – Rajouri and Poonch – have been closed.
People living along the de facto border have been asked to leave their homes.
Both India and Pakistan claim all of Muslim-majority Kashmir, but control only parts of it. The two nuclear powers have fought three wars and a limited conflict since independence from Britain in 1947 – and all but one were over Kashmir.
Timeline of India-Pakistan tensions
October 1947: First war between India and Pakistan over Kashmir just two months after they become independent nations.
August 1965: The neighbours fight another brief war over Kashmir.
December 1971: India supports East Pakistan’s bid to become independent. The Indian air force conducts bombing raids inside Pakistan. The war ends with the creation of Bangladesh.
May 1999: Pakistani soldiers and militants occupy Indian military posts in Kargil mountains. India launches air and ground strikes and the intruders are pushed back.
October 2001: A devastating attack on the state assembly in Indian-administered Kashmir kills 38. Two months later, an attack on the Indian parliament in Delhi leaves 14 dead.
November 2008: Co-ordinated attacks on Mumbai’s main railway station, luxury hotels and a Jewish cultural centre kill 166 people. India blames Pakistan-based group Lashkar-e-Taiba.
January 2016: Four-day attack on Indian air base in Pathankot leaves seven Indian soldiers and six militants dead.
18 September 2016: Attack on army base in Uri in Indian-administered Kashmir kills 19 soldiers.
30 September 2016: India says it carried “surgical strikes” on militants in Pakistani Kashmir. Islamabad denies strikes took place.