Indian and Bangladeshi border guards have been exchanging fire in a dispute over construction work strengthening the banks of a common river.
Indian border guards said they opened fire in protest at construction of an embankment on the Mahananda river.
Bangladesh says the Indian troops were merely seeking to divert attention from their own construction work.
No one has been injured, but several villages have been evacuated on both sides of the border.
Indian troops from the Border Security Force (BSF) opened fire after more than 300 Bangladeshi construction workers began work on a structure on the Mahananda river, Indian officials said.
The Mahananda separates the Maldah district of India's West Bengal state from the Rajshahi region in Bangladesh.
Construction work on the border is a source of unrest
BSF officials argue that the construction of a concrete embankment by Bangladesh will increase erosion on the Indian side and that it violates a 1975 border agreement between the two countries.
They say the question of reinforcing the river bank is still under discussion by the Joint Rivers Commission.
Officials of the Bangladesh Rifles (BDR) said that the Indian firing was totally unprovoked.
They say that the BSF soldiers started firing four kilometres from where they were building a similar structure on the Indian side of the river.
"It was a military tactic to divert our attention from what was going on along the river," a BDR official told the BBC.
Both sides assert they are undertaking construction outside of the "no-build zone" 150 metres either side of the border.
They have deployed additional troops along either side of the disputed stretch of river.
Bangladesh and India enjoy generally friendly relations but tensions have increased since India began fencing off its border to keep out what it describes as illegal immigrants and "cross-border insurgents".
Several skirmishes have been reported between the two border forces during the past year.