Indian shelling has forced thousands of villagers from their homes in Pakistani-controlled Kashmir, a Pakistani politician has said.

The evacuation from villages in the Bhimber district came after seven Pakistani soldiers were killed by Indian shelling on Monday. The two sides have repeatedly traded fire in recent weeks across the Line of Control that divides the Himalayan region.

The nuclear-armed rivals each claim Kashmir in its entirety, and have fought two of their three wars over its fate.

Waqar Noor, a member of Kashmir's Legislative Assembly, said authorities were making arrangements to accommodate thousands of villagers from Bhimber, who are currently sheltering in open fields or the homes of relatives.

Mr Noor said the villagers would most probably shelter in schools, but that the government may set up a “tent village” if the number of evacuees keeps growing.

Wakalat Hussain, a farmer from the village of Bania, said the shelling and heavy gunfire had forced the villagers to flee, leaving their homes and animals behind.

“Like thousands others, I'm lying here under the open sky with five children and my wife, with no arrangements for food and shelter,” Mr Hussain said by phone. “At least we don't have to fear being killed by the constant Indian shelling.”

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Another farmer, Muhammad Khadim from the village of Kheruwal, said he, his wife and their seven children passed a sleepless night listening to the shells explode before fleeing from their home near the Line of Control.

Raja Farooq Haider, the Prime Minister of Pakistan-held Kashmir, told reporters that the government may have to provide shelter for up to half a million people if India escalates its “aggression” across the Line of Control. The Prime Minister said the government has so far made arrangements for sheltering some 50,000 villagers.

India says it has been retaliating for Pakistani violations of a 2003 ceasefire. An Indian army officer said Pakistani troops fired across the frontier for nearly four hours on Tuesday. He spoke on condition of anonymity because he was not authorised to brief reporters. He said there were no Indian casualties.

Meanwhile, Pakistan's top foreign policy official said on Tuesday he plans to attend the Heart of Asia conference in India and suggested the visit could be used to “defuse the tension” between the neighbours.

Sartaj Aziz's trip to India would be the first by a senior Pakistani official since gunmen raided an army base in Indian-controlled Kashmir and killed 19 soldiers in September, an attack Delhi blamed on Pakistan-based militants.

“Its a good opportunity to defuse the tension,” Mr Aziz, who is an adviser to Pakistan's Prime Minister Nawaz Sharif on foreign affairs, told the state-run PTV channel.

Despite hinting at a possible detente, Mr Aziz said there was no official meeting scheduled with Indian officials. “It's early to say. Depends upon the situation,” he said.

The Heart of Asia conference focusing on Afghanistan is due to be held in the first week of December in the northwestern Indian city of Amritsar, close to the Pakistani border.