A Central Reserve Police Force official said two members of the force were killed during an encounter that has lasted more than 48 hours.
Fighting resumed overnight into dawn Saturday, leaving two siblings and their mother dead in Indian-controlled Kashmir. It marked the first fatalities for Pakistani troops since Wednesday, when tensions dramatically escalated between the nuclear-armed countries over Kashmir, which is split between them but claimed by both in its entirety.
The military's media wing, Inter Services Public Relations (ISPR), said in a statement, Indian forces targeted civilian population in Nakyal Sector along LoC.
The flare up appeared to be easing on Saturday after Pakistan handed back a captured Indian fighter pilot on Friday night, amid efforts by global powers to prevent another war between the arch enemies.
The Emir of Qatar Sheikh Tamim bin Hamad Al Thani held a telephonic conversation with Prime Minister Imran Khan and appreciated Pakistan's gesture of releasing the Indian prisoner of war.
Chidambaram, who has also served India as union minister, said: "We have to live with Pakistan forever and ever".
There was no let-up in war rhetoric with Indian Prime Minister Narendra Modi saying no-one could "dare threaten" a "new, fearless and decisive" India.
After the Pulwama attack, the Indian Air Force carried out a counter-terror operation, hitting what it said was a JeM training camp in Balakot, deep inside Pakistan on February 26.
People carry national flags as they celebrate, after Pakistan shot down two Indian military aircrafts, in Lahore, Pakistan February 27, 2019.
While the exact details of the restrictions were discussed in a closed-door session, and thus remains classified, Miller then broadly outlined some of the restrictions, which he said were over a "dozen new and unprecedented elements" of the security plan for Pakistan.
Also in Pakistan-administered Kashmir, government official Umar Azam said the Indian troops with heavy weapons "indiscriminately targeted border villagers" along the LoC.
Jaitley dismissed suggestions that the rapid escalation in tensions with Pakistan had anything to do with India's domestic politics ahead of a general election due by May.
A top Indian minister, meanwhile, said on Saturday the government would not share proof that "a very large number" of militants were killed in air strikes inside Pakistan this week.
During the phone conversation between the two leaders, May welcomed Khan's commitment to reduce tensions following the return of captured Indian Air Force pilot Abhinandan Varthaman by the Pakistani authorities earlier this week.
India blamed Pakistan for backing the freedom fighters and vowed to take revenge.
Cross-border shelling in the past few days has killed seven people on the Pakistani side and four on the Indian side of Kashmir. Pakistani officials said China is expected to send an envoy to Pakistan and India this coming week.
Mughal reported from Muzafarabad, Pakistan.