New Delhi: India Thursday rejected Pakistan's demand that the UN be asked to probe allegations that Pakistani troops killed and beheaded two Indian soldiers in Jammu and Kashmir as Indian political parties called for "tough" action against Pakistan.

"That (Pakistan's) demand is rejected out of hand. We will not internationalise the issue nor go to the United Nations," Finance Minister P. Chidambaram told reporters after a cabinet meeting.

He said the cabinet committee on security was briefed about the Tuesday killings near the Line of Control (LoC).

"Our report is that the Indian forces did not violate the ceasefire (in place in LoC since 203)," he said.

In Islamabad, Pakistan Foreign Minister Hina Rabbani Khar reiterated the demand for a third party enquiry into ceasefire violations on the LoC.

Khar, addressing a news conference, said Islamabad abides by the 2003 ceasefire. She added that Pakistan has also contacted UN Military Observer Group for India and Pakistan (UNMOGIP) to probe the killing of one of its soldiers Jan 6 in alleged firing by Indian troops. She had a day ago denied the killing of Indian soldiers was a "tit-for-tat" reaction.

According to Radio Pakistan, a Pakistani soldier was killed Thursday when "Indian troops resorted to unprovoked firing at Tatta Pani Sector in Kotli today".

Hamid Mir of Geo TV said in a tweet: "Tatta Pani sector of Kashmir became another battlefield, one Pakistani soldier Havaldar Mohyudin martyred by Indian shelling."

Home Minister Sushilkumar Shinde said the heightened border tensions will not to come in the way of a liberalized visa agreement between India and Pakistan.

"The visa agreement (inked last year) will be carried out as scheduled, there is no rethink on it," Shinde told reporters.

National Security Advisor Shivshankar Menon noted that ceasefire violations by Pakistan on the LoC had increased last year. "There has been an increase in ceasefire violations by Pakistan and in infiltration attempts in 2012 over 2011."

The opposition Bharatiya Janata Party said it would organize nation-wide protests Friday over the killings of the two soldiers.

"People are very angry over this matter," BJP spokesperson Nirmala Sitaraman said, adding: "We hold the Pakistan government and army accountable for breaking the ceasefire."

"We should give proof, name and shame Pakistan for having done this... we can't afford to have our goodwill misused," she added.

BJP leader Sushma Swaraj said the party would support the UPA government if it takes "tough" decisions against Pakistan for the killings.

Shiv Sena executive president Uddhav Thackeray demanded that India should "take revenge" against Pakistan for the brutal killing of the two soldiers.

Bahujan Samaj Party (BSP) chief Mayawati asked the government to take "strong action" to ensure that such brutalities are not repeated and that India-Pakistan relations did not suffer.

The US has asked India and Pakistan to talk to each other to improve relations.

"We're urging both sides to take steps to end the violence. We continue to strongly support any efforts to improve relations between the two countries," State Department spokesperson Victoria Nuland told reporters in Washington.

The UNMOGIP has asked India and Pakistan to respect the ceasefire and de-escalate tensions. The UNMOGIP said it has received an official complaint from the Pakistan Army to probe the Jan 6 killing of a Pakistani soldier. But Martin Nesirky, spokesman for Secretary-General Ban Ki-moon, said no official complaint had been from India or Pakistan on the second "alleged incident" of Jan 8 for a probe.

Indian Army sources have denied a media report linking the current border skirmishes to an elderly Kashmiri woman crossing into Pakistani Kashmir to be with her children. The sources also denied the Indian Army had transgressed the LoC on Jan 6, and said soldiers had only carried out "controlled retaliation" in response to a ceasefire violation by Pakistan.