Troops from India and Pakistan have fired small arms along Kashmir's Line of Control (LoC) for a third night as tensions grow following Tuesday's deadly militant attack on tourists in the Indian-administered section of the contested region.

India said on Sunday that its troops had responded to "unprovoked" firing of small arms by Pakistani soldiers along the LoC, which separates the Indian- and Pakistani-controlled parts.

"(Our) own troops responded effectively with appropriate small arms fire," India's military said of the incident, which has not been reported by Pakistan.

No casualties were reported.

Pakistan calls for neutral investigation into attack

Islamabad has meanwhile rejected New Delhi's accusations of supporting "cross-border terrorism" following the attack, in which 26 people were killed by gunmen in a tourist hotspot in Pahalgam.

Pakistan's Prime Minister Shehbaz Sharif on Saturday said his country was "open to participating in any neutral, transparent and credible investigation" of the incident.

The Pakistani interior minister, Mohsin Naqvi, also told a press conference that Islamabad was "fully prepared to cooperate with any neutral investigators to ensure that the truth is uncovered and justice is served."

"Pakistan remains committed to peace, stability and the following of international norms but will not compromise on its sovereignty," he said.

India takes reprisal measures amid manhunt

New Delhi announced a host of measures earlier this week following the attack by gunmen on tourists, the worst attack on civilians in years in the region.

Delhi has suspended a water-sharing treaty, announced the closure of the main land border crossing with Pakistan, downgraded diplomatic ties and withdrawn visas for Pakistanis.

As part of their manhunt for three suspected attackers, Indian soldiers on Saturday bombed the family home of one of them, while nine houses belonging to other suspected militants have also been bombed since the attack, AFP cited an unnamed police official as saying.

India's navy meanwhile said it had carried out drills to "revalidate and demonstrate readiness of platforms, systems and crew for long-range precision offensive strike." without detailing where the drills took place.

The Indian Express newspaper on Sunday quoted a top government source as saying "there will be military retaliation," with officials "discussing the nature of the strike."

Kashmir a hotly contested region

Kashmir has been split between India and Pakistan since the countries obtained their independence from Britain in 1947.

However, both have always claimed the territory in full.

Since 1989, there has been an ongoing insurgency in Kashmir by rebel groups calling for independence or for the region to join Pakistan.

India and Pakistan, which both possess nuclear arms, have gone to war three times over the Kashmir issue, amid a host of mostly low-level skirmishes.

Edited by: Kieran Burke