It was the first time since last Friday that heavy fire had been exchanged in the area.

A government statement said fighters were still holding positions in the Mushkoh valley, Drass and Batalik sectors inside Indian territory.

Indian officials say Pakistan responded to its barrage by shelling Drass.

Nearly 60 Indian soldiers were poised near one peak ready to evict the fighters if they did not leave, Indian army officers were reported as saying.

(Click here to see a map of the area)

Indian and Pakistani army commanders were expected to discuss the dispute during their weekly telephone talk on Tuesday.

A withdrawal of Pakistan-backed forces from Indian-administered Kashmir was meant to have been completed by last Saturday, after some two months of fighting.

Although nearly all the intruders have retreated into Pakistan, the Indian army chief, V P Malik, has warned forward units to remain vigilant against what he said were continued attempts by Pakistan to destabilise the region.

Militants attack near Jammu

Earlier, suspected militants killed 15 people including eight women in an attack on a village in Jammu and Kashmir.

The BBC's Binoo Joshi: "Nobody has claimed responsibilty for this attack"

Police said that early on Tuesday gunmen entered the village in Doda district, north of the state's summer capital, Jammu. Among the dead were five members of the village defence committee, set up to protect remote villages from such attacks.

"Members of the armed village defence committee retaliated and engaged the militants for about two hours in a gunbattle," an official told the AFP news agency.

A police official said another six people were wounded, four of them seriously.

The BBC's Mike Wooldridge: "India calls it cross border terrorism"

No one has admitted carrying out the attack but police suspect militant groups, two of which - Hizbul Mujahideen and Lashkar-e-Taiba - are active in the area.

In another incident on Tuesday, four construction workers were killed in an attack on their camp in the Poonch district of Jammu and Kashmir, which borders Pakistan.

Indian officials have said they expected a resurgence in separatist violence following the end of the two-month conflict along the line of control.

In Washington, US Secretary of State Madeleine Albright called for an end to violence in Kashmir.

"Acts of terrorism must stop immediately because such actions make the Kashmir conflict more, not less, difficult to resolve," she said.

Meanwhile, Indian Defence Minister George Fernandes has rejected accusations of human rights violations by the Indian army in Kashmir.

Reacting to reports by Human Rights Watch and Amnesty International, Mr Fernandes told the BBC's HARDtalk programme: "There have been no [summary] executions by the army. If there have been any such accusations, then those accusations with documentation should have been made available to the government."

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