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(CNN) Pakistan's Prime Minister, Muhammad Nawaz Sharif will convene an emergency cabinet meeting Friday about the "deteriorating situation" in Kashmir, he said in a statement.

Two Pakistani soldiers were killed after clashes with Indian troops on the de-facto border between the two countries, Pakistan's military said Thursday.

The Indian army said it had conducted "surgical attacks" in the disputed region to foil a "terrorist attack," according to India's Director General of Military Operations.

But Pakistan insisted that no incursion had taken place into the territory it controls, saying there had only been an exchange of fire. It promised a "forceful response" if there was a repeat of the operation.

'Credible information'

India said it had acted to protect its citizens -- Lieutenant General Ranbir Singh told reporters on Thursday the strikes had been based on "specific credible information" that militants were planning to carry out strikes in Indian cities, including Jammu.

"The operations were basically focused to ensure that these terrorists do not succeed in their design of infiltration and carrying out destruction and endangering the lives of citizens in our country," he said.

An Indian government official told CNN some border villages in the Jammu region of Jammu and Kashmir State had been evacuated. Educational institutions were also ordered closed on Thursday evening.

The incident comes less than two weeks after 18 Indian soldiers were killed in an attack by armed militants on an army base in Uri , about 63 miles (102 kilometers) from Srinagar, the summer capital of Indian-administered Jammu and Kashmir.

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It was one of the deadliest attacks to take place on an army base in Kashmir since militant attacks began in the late 1980s, and sparked a furious war of words between India and Pakistan.

Pakistan leader slams 'evil designs'

Pakistan's Prime Minister Nawaz Sharif condemned the attack in a statement, calling it "unprovoked and naked aggression" of Indian forces.

He said Pakistan's forces were capable of defending their territory and would stop any "evil design" against their country. "No external force has the capability or capacity to challenge the sovereignty and territorial integrity of Pakistan," he said.

Pakistan's Defense Minister Khawaja Asif said the country's army had responded in a "befitting" manner. "If India tries to do this again we will respond forcefully. India is doing this only to please their media and public," he said.

Pakistan's Foreign Ministry said India's claims to have carried out surgical strikes were "baseless" and accusing India of "deliberately" escalating tensions.

"Such falsified, concocted and irresponsible statements can only escalate the already fragile security situations in the region," the statement said.

In a further statement, it said that its Foreign Secretary had summoned the Indian High Commissioner and "condemned the unprovoked firing" by the Indian forces. The Foreign Secretary also alleged there had been threats made to the life of Pakistan's High Commissioner in New Delhi.

He urged the Indian government "to ensure the safety and security of Pakistan's High Commissioner, other officials and their families, in accordance with the Vienna Convention."

UN encourages 'restraint'

The UN said it was "following this situation with great concern."

UN spokesman Stephane Dujarric said Thursday: "The UN Military Observer Group for India and Pakistan, UNMOGIP, is aware of the ceasefire violations and right now is liaising with the concerned authorities to obtain further information.

"The United Nations calls on the Governments of India and Pakistan to exercise restraint and encourages them to continue their effort to resolve their differences peacefully and through dialogue."

Kashmir, a Muslim-majority region, has been disputed territory between India and Pakistan for the past 70 years.

Both of the nuclear-armed countries hold separate parts of it and have fought two wars, in 1947 and 1965, over their claims. They came close to a third, in 1999.

Speaking to CNN on Thursday, a resident of Indian-administered Kashmir, Mushtaq Ahmad Chaudhary, said border residents had not forgotten the horror of having shells and bullets raining down on their communities.

"The latest developments have set in the fear and tension as the deteriorating situation may trigger cross [border] artillery duels [such as] we have witnessed during the 1990s when several villagers were killed and wounded," he said.

Empty threats?

Despite both sides' fierce rhetoric, it was unlikely there would be a military escalation at this point, IHS Global Insight analyst Asad Ali told CNN. But tensions will remain high, Ali said.

"What I would say is that the Pakistani generals are very much ready to use nuclear weapons, if there is a major border incursion (from India)," he said.

Ali said both the Indian and Pakistani governments were playing to their domestic audiences, as much as each other.

"The Pakistan military can't betray to their domestic audience that they've allowed the Indians to actually cross the line of control... and there was no action against that," he said.

"On the Indian side, (Prime Minister Narendra) Modi needs to show his domestic constituents that he's taken aggressive action. This is something he promised before he got elected in 2014."