Tensions have escalated in the Himalayan region since India launched a crackdown against pro-separatist supporters. Pakistan's outgoing army chief warned India of fostering "state terrorism" in the region.
Up to four gunmen on Tuesday launched an attack on a major army base in the India-administered Kashmir region, leaving two soldiers dead and four others wounded, officials said.
"Early morning an encounter took place and terrorists have entered one of our military areas. The situation is under control," said defense ministry spokesman Manish Mehta during the siege.
"Terrorists are armed, they have weapons, and that is why firefight is taking place," he added.
The army base in Nagrota is one of four commander centers in India's Jammu and Kashmir state, and home to more than 1,000 officers. No group has claimed responsibility for the deadly attack.
Tensions in the region have escalated since July, when Indian forces killed a popular separatist leader, prompting mass protests and a subsequent crackdown that has left at least 80 citizens dead.
In September, suspected militants killed 19 Indian soldiers at an army base in Kashmir, marking the worst attack of its kind in more than a decade.
'Peace at risk'
Meanwhile, Pakistan's outgoing army chief warned New Delhi over increasing tensions at the highly-militarized border region.
"I want to make it clear to India, that taking our policy of patience (in Kashmir) as a sign of any kind of weakness will prove to be dangerous to it," said General Raheel Sharif during an official ceremony turning power over to General Qamar Javed Bajwa.
"Unfortunately in recent months, the rising state terrorism in (India-administered) Kashmir and India's aggressive steps have put regional peace at risk," Sharif added.
Since gaining independence in 1947, India and Pakistan have claimed Kashmir in full, fighting two wars for the Himalayan region.
ls/kl (Reuters, AFP, AP)