The conflict between India and Pakistan over the disputed territory of Kashmir has escalated dramatically — and the rivals are both armed with nuclear weapons.

Key points: India launched air strikes in Pakistan in retaliation for a Kashmir car bombing

India launched air strikes in Pakistan in retaliation for a Kashmir car bombing Pakistan responded by shooting down two Indian jets and capturing a pilot

Pakistan responded by shooting down two Indian jets and capturing a pilot The two countries previously fought three wars and went to the brink on a fourth

On Wednesday Pakistan's military shot down two Indian warplanes and captured an Indian pilot, raising tensions to a level not seen for decades.

The attack came just hours after Pakistan accused India of firing mortar shells into its side of divided Kashmir, killing six people.

The two countries have a long and complicated history, one that is not always easy to grapple with.

Here's what you need to know about the situation.

What's the latest?

The recent tensions began with a Kashmiri militant suicide bombing of an Indian paramilitary convoy in mid-February.

That attack killed 46 people, mostly Indian soldiers, making it the deadliest attack in Kashmir's volatile history.

India's Prime Minister Narendra Modi warned of a "crushing response", and the country soon followed through, launching air strikes in Pakistani's territory in retaliation this week.

Pakistan said its Prime Minister would "engage with global leadership to expose irresponsible Indian policy". ( Pakistan Press Information Department via AP )

Meanwhile, Pakistani Prime Minister Imran Khan gave a speech saying it would be out of both leaders' control if the situation escalated further.

Both countries now say they have shot down the others' fighter jets, and Pakistan has also launched strikes on India.

It has led the two countries to the brink of a dangerous war.

But how did it come to this?

Supporters of India's ruling Bhartiya Janata Party have celebrated the airstrike on Pakistan. ( AP: Altaf Qadri )

It depends who you ask.

India has placed the blame squarely on Pakistan's shoulders since the deadly car bombing, saying it has "incontrovertible evidence" Pakistan was involved and that it supports the militant group that claimed responsibility.

Australia's Government seems to support India's position.

Foreign Minister Marise Payne released a statement condemning the attack as "horrific" and calling on Pakistan to take "urgent and meaningful action against terrorist groups in its territory".

In turn, Pakistan and its supporters say Indian troops in Kashmir have repeatedly attacked and killed people protesting against India's administration in parts of the disputed territory, a position supported by the United Nations Human Rights Office.

And Pakistan-born British MP Yasmin Qureshi told the House of Commons that Mr Modi had "inflamed tensions in occupied Jammu [and] Kashmir", referring to the areas in dispute.

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The history of India and Pakistan — in a nutshell

When Britain finally relinquished its colonial jewel of India in 1947, it was divided into the new nations of India and Pakistan.

The countries were split down roughly religious lines, meaning India's population was dominated by Hindus and Pakistan was a majority-Muslim state.

Map A map showing the contested region of Kashmir in relation to Pakistan and India.

But the plan also sparked a wave of deadly religious violence and unprecedented mass migration as people rushed to join the country that represented their religion.

The fate of Jammu and Kashmir — then ruled by a prince — was never officially sealed, with the prince signing over the states to India but the UN recommending an election that was never held.

Pakistan and India subsequently claimed competing swathes of the territory and have fought three wars since independence, two over the disputed Himalayan region.

The nations also waged a limited conflict over Kashmir in 1999, and went to the brink again in 2002 after a Pakistani militant attack on India's parliament.

Who are the key players?

Sorry, this video has expired Imran Khan meets with national security advisers as Indians celebrate Kashmir strike

Mr Khan was only elected to the position in August 2018, sweeping to power on promises of tackling poverty and fighting corruption.

Before his Tehreek-e-Insaf (PTI) party claimed victory, he was best known outside the country for his career as a top international cricketer.

Meanwhile, Mr Modi is a divisive figure whose critics accuse him and his Bharatiya Janata Party of pandering to right-wing Hindu nationalism, stoking tensions between Hindus and religious minorities in India.

He's also up for re-election in May, and some analysts believe his decision to order air strikes could pay off politically.

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But India's opposition parties have accused him of capitalising on conflict, releasing a joint statement criticising the "blatant politicisation of the sacrifices made by our armed forces".

Both leaders are fierce nationalists, setting the stage for a tense standoff as they attempt to navigate an extremely tricky conflict.

Could it really lead to nuclear war?

Pakistan has closed its airspace entirely, forcing airlines to reroute planes around the country. ( Screenshot: Flight Radar )

Mr Khan has called an emergency session of Pakistan's Parliament and is consulting with his nuclear chief in the wake of the Indian air strikes.

Somewhat ominously, a spokesman told a news conference "you all know what that means".

World leaders, and even well-known public figures such as Pakistani activist Malala Yousafzai, are now calling for calm.

In a statement posted to Twitter, she called on the two leaders to "show true leadership in this difficult time: to sit down, shake hands and settle the current conflict and longstanding issue of Kashmir through dialogue".

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Many observers believe the two countries are now posturing, and would be unlikely to escalate the conflict much further.

If the predictions are correct, it wouldn't be the first time tensions had flared and quickly extinguished.

However, on both sides, citizens have been preparing for the possibility of war breaking out, with hopes that it doesn't.