Image copyright AFP Image caption Indian PM Manmohan Singh issued strong words on Pakistan

Indian PM Manmohan Singh has said it "cannot be business as usual" with Pakistan after deadly exchanges along the disputed Kashmir border last week.

He said the deaths of two Indian soldiers - one of whom India says was beheaded - were "unacceptable".

His remarks follow the Indian army chief's call for troops to "aggressively" respond to firing from Pakistani troops.

Both countries claim Kashmir and have fought two wars over it.

Two Pakistani soldiers were also killed last week.

The violence has plunged the neighbours into the worst crisis in relations since the Mumbai attacks of 2008, which were blamed on militants based in Pakistan. Both sides deny provoking last week's clashes.

Claimed by both countries, Kashmir has been a flashpoint for over 60 years. Exchanges in the disputed area are not uncommon but rarely result in fatalities.

Analysis This is the worst crisis to hit India-Pakistan relations since the 2008 Mumbai attacks and a fledgling peace process under way since February last year looks like it could unravel. Pakistani hockey players are being sent back from India and a landmark visa-on-arrival scheme has been deferred. These were small but important measures aimed at building trust between the two neighbours, and it is not insignificant that they have been affected. What is alarming is the strong reactions, particularly in India. Belligerent statements from the army chief as well as opposition politicians have put the government on the defensive, so it will be difficult for it to appear conciliatory towards Pakistan. This is an election year in Pakistan and we are a year away from polls in India - so both governments will have their eye on domestic opinion. An armed confrontation is extremely unlikely. Both sides have indicated that there is a need for restraint, so although the rhetoric is harsh it is unlikely to be matched with action.

'Barbaric act'

The prime minister made his remarks in the capital, Delhi, to mark Army Day.

"After this barbaric act, there cannot be business as usual with Pakistan. What happened at LoC is unacceptable," he said, referring to the Line of Control, which divides Kashmir.

"I hope Pakistan realises this. I hope Pakistan will bring the perpetrators to book."

India was set to begin a landmark visa-on-arrival deal for Pakistani senior citizens at the Wagah crossing, but this has been put on hold.

Officials from both countries held a meeting at the border on Monday aimed at reducing tensions. Neither side have commented on the talks.

Both countries have also summoned each other's envoys to protest about the killings of the soldiers.

The Indian army chief, Gen Bikram Singh, on Monday accused Pakistan of planning the attacks that killed the two Indian soldiers.

He said the 8 January attack was "pre-meditated, pre-planned activity" and urged Indian troops to be "aggressive and offensive in the face of provocation and fire" from Pakistan.

Despite Indian accusations that Pakistan is in breach of ceasefire accords, two Indian newspapers have suggested the reverse may be true.

Kashmir dispute Claimed by both India and Pakistan; de facto partitioned when ceasefire line agreed in January 1949

Jammu and Kashmir is the only Indian state with a Muslim majority (60%)

Sparked wars between India and Pakistan in 1947-48 and 1965

Third conflict in 1999, when Pakistani-backed forces infiltrated Indian-controlled territory in the Kargil area

Armed revolt against Indian rule erupted in 1989, since when thousands have been killed

Fears it could trigger a nuclear conflict, as Pakistan and India both declared themselves nuclear powers in 1998

Ceasefire across Line of Control (LoC) agreed in 2003 Q&A: Kashmir dispute

The reports last week said Indian commanders might have precipitated the clashes by ordering new observation posts on the LoC after a 70-year-old woman crossed it unhindered last year.

The Indian army denied any provocative actions but said there had been "routine maintenance of fortifications".

The border clash has come as a major setback to ties between the two neighbours, with the prime minister saying Pakistan was living in denial, says the BBC's Sanjoy Majumder in Delhi.

In a related development, eight Pakistani hockey players who were due to take part in a tournament in India are being sent back, our correspondent adds.

India suspended a peace process with Pakistan following attacks by Pakistan-based militants in Mumbai in 2008. Negotiations resumed in February last year.

Thousands of people have been killed in Indian-administered Kashmir since an armed revolt against Indian rule erupted in 1989. There has been a ceasefire in Kashmir since late 2003.