Mike Wooldridge in Delhi: The kind of development the international community was fearing

A military spokesman said one plane crashed after developing engine trouble, and that another, going to its aid, crashed after being fired on from the Pakistani side of the disputed Kashmir border.

Pakistan said it shot down both jets - a MiG-21 and a MiG-27 - after they crossed into its territory. India said they were lost inside Indian territory.

(Click here to see a map of the area)

The incident came as India carried out further air strikes against what Delhi describes as Pakistani infiltrators inside Indian-administered Kashmir.

Pakistan said it was holding one of the pilots as a prisoner of war, and issued a call for UN mediation to avert an all-out conflict between the two nuclear powers.

Indian Air Vice Marshall SK Malik said: "This act is a hostile act and a provocative act."

Pakistan said one pilot had been killed, and the wreckage of the planes had been in found between 6km and 7km inside Pakistani territory.

Mushahid Hussain: "The planes were violating our territorial integrity."

The shooting marks a new level of conflict between Pakistan and India.

Pakistani Information Minister Mushahid Hussain said the jets were targeted in self defence.

"We hope that Indians will see sense, they will see reason, and they will stop these violations of Pakistani air space," he said.

No let-up, says India

India launched a new wave of air attacks on Thursday, despite international calls for restraint.

Helicopter gunships and airforce bombers took part in strikes in mountainous territory near the line of control which divides Indian and Pakistani-administered Kashmir.

The BBC's Mike Wooldridge: "There is to be no let up in the air strikes"

The air attacks against the infiltrators, said by India to be mostly Afghan nationals, but with some Pakistani army regulars included, began on Wednesday.

Indian officials say there will be no let-up in the air strikes until their forces have reached their goal of re-occupying their positions at heights of 5,000 metres, which are being held by a large group of infiltrators.

India says it has been targeting tents, stores and hideouts used by the infiltrators. Indian TV reported that at least 200 had been killed.

India has again denied Pakistani reports that bombs fell on the Pakistan side of the line of control.

Pakistan says it has no knowledge of a recent infiltration of rebels from Pakistani territory, and denied helping the infiltrators.

It has warned that it reserves the right to retaliate if Indian attacks spill over the line. It has put its army on high alert and called on the United Nations to send an envoy to the region.

An Indian military spokesman said some military movement had been observed on the Pakistan side, but nothing provocative.

For several weeks, India had been using mortar fire and heavy artillery in its attempt to dislodge more than 600 men from mountainous territory in the northern Kargil region.

BBC's Daniel Lak: Political initiative will be necessary to calm tensions

The two countries have fought three wars in the past 52 years, two of them over Kashmir.

The intensification of the conflict is of particular concern following Indian and Pakistani nuclear tests in May 1998.

The BBC's correspondent in Delhi, Daniel Lak, says at this point, all-out war between India and Pakistan is thought unlikely.

But he says some political initiative will be necessary to calm tensions and there is no sign of where that might come from.