Pakistan accused India of "warmongering" and lodged an official protest on Wednesday after another soldier was killed in disputed Kashmir in a flare-up that threatens to derail a fragile peace process.

Diplomats on both sides have warned against allowing a spate of deadly cross-border incidents to wreck the tentative progress that has been made since a total break in relations following the 2008 attacks on Mumbai.

But tensions escalated as Pakistan reported another of its troops had been killed Tuesday in "unprovoked" firing across the militarised border, bringing the toll on both sides to five since January 6.

Pakistan army's director general of military operation telephoned his Indian counterpart Wednesday to "strongly protest" over the death, an official told AFP.

Foreign Minister Hina Rabbani Khar hit out at strident comments by Indian politicians over the incidents, and warned against "upping the ante" between the nuclear-powered neighbours.

"We see warmongering," Khar said at the Asia Society in New York late Tuesday.

"It is deeply disturbing to hear statements which are upping the ante, where one politician is competing with the other to give a more hostile statement."

India says two of its soldiers have been killed since hostilities erupted along the Line of Control (LoC), the de facto border in Kashmir where a ceasefire has been in place since 2003.

It has demanded the return of the soldier's head which is still missing.

Pakistan, however, denies its forces are responsible for the killings and says three of its troops have now been killed in the spate of incidents.

India's army chief Bikram Singh, who has already called on his commanders to respond "aggressively" to any Pakistani firing, made a highly-charged visit Wednesday to the home of the beheaded soldier.

"Whatever we need to do we are doing," Singh said in brief comments to reporters outside the home in the northern state of Uttar Pradesh.

The two countries have fought three wars since their independence in 1947, two of them over the Himalayan region of Kashmir. But Khar said they had to get over their "narrative of hostility".

"The doors to dialogue are open," she said. "We need to meet at any level, I think we need to call each other, we need to become mature countries which know how to handle their truth."

Khar again denied Indian accusations that Pakistani forces had beheaded one of two soldiers that India says were killed on January 8. She said an inquiry had found "no evidence" of the deaths.

Her comments are likely to stoke further indignation in India, whose prime minister Manmohan Singh on Tuesday condemned the beheading as "unacceptable".

"It cannot be business as usual" with Pakistan, Singh said in his first public reaction to the attack which has caused outrage in the army's ranks.

Indian newspapers said the prime minister had highlighted a growing sense of frustration in New Delhi at Islamabad's denial of responsibility.

"Singh's comments signalled a hardening of the government's stand which had so far seemed to be trying to resist demands for pausing the peace process," The Times of India said.

After the collapse in ties following the 2008 Mumbai attacks, which India blamed on Pakistan-based militants, relations had been making steady progress, with talks focused on opening up trade and offering more lenient visa regimes.

But the mood has soured dramatically since the apparent tit-for-tat exchanges along the militarised border.

On Tuesday, India was meant to begin allowing Pakistanis over the age of 65 to obtain a visa on arrival at the border in Punjab.

However the programme was put on hold indefinitely hours after Indian officials said it had come into force, although the delay was attributed to "technical" reasons.

Nine Pakistani players were also withdrawn from a new field hockey league in India and asked to return home just before Singh's comments.