Five Indian soldiers have reportedly been killed in an ambush in the restive India-administered Kashmir region while Pakistan has denied any firing from its side.

New Delhi has pointed fingers at the Pakistani military for the incident, a claim strongly refuted by officials in Islamabad.

"Was briefed early this morning about news that 5 of our soldiers had been killed on the LoC. My heartfelt condolences to their next of kin," said the chief minister of Jammu and Kashmir Omar Abdullah on his Twitter account.

The soldiers were believed to have been on a regular patrol on the sensitive Line of Control (LoC) in Chakandabad area of Poonch. One of the soldiers is said to have escaped the attack by hiding behind a bush and his statement will be considered crucial.

"These incidents don't help efforts to normalise or even improve relations with Pak & call into question the Pak govt's recent overtures," said Abdullah.

Indian media reports have speculated that the Pakistani military helped the militant group Lashkar-e-Toiba in carrying out the attack.

The incident is likely to further strain India-Pakistan relations. "This is an extremely unfortunate incident. If Pakistan wants to have better relations with India this is not the way," said deputy interior minister R P N Singh.

The incident has taken place at a time when the nuclear-armed rivals are planning to revive the stalled peace process between the two countries.

"There was no indiscriminate firing from our side," a Pakistani security official told Reuters while another source said on condition of anonymity: "There was no such incident whatsoever. There was no firing on the border."

The two countries have often engaged in a war of words fuelled by such firing incidents and killing of soldiers.