JAMMU, India (Reuters) - India accused old enemy Pakistan of sending troops across the heavily militarised line dividing the disputed region of Kashmir on Tuesday, and said two of its soldiers were killed and one wounded in a half-hour gunfight.

The body of one of the slain soldiers was found "badly mutilated" in a forested area of the Himalayan territory, said Rajesh K. Kalia, spokesman for the Indian army's Northern Command.

A Pakistani army spokesman denied what he said were Indian allegations of "unprovoked firing" across the Line of Control (LoC) between the nuclear-armed neighbours.

He branded India's allegations "propaganda" to divert attention away from a clash along the LoC two days earlier in which Pakistan had said one of its soldiers was killed after an Indian incursion. India denied its troops crossed the line.

India and Pakistan have fought three wars since their independence in 1947, two of them over Kashmir.

Firing and small skirmishes between the two countries are common along the LoC despite slowly improving ties in recent years. The Indian army says eight of its soldiers were killed in 2012, in 75 incidents.

Away from the border, ties seem to be better. Pakistan's cricket team completed a two-week tour of India on Sunday, the first time it has visited in five years.

Kalia said Tuesday's "intrusion" about 600 metres across the LoC in Mendhar - about 220 km (140 miles) north of the Indian city of Jammu - marked "a significant escalation ... of ceasefire violations and infiltration attempts supported by the Pakistan Army".

"Pakistan army troops, having taken advantage of thick fog and mist in the forested area, were moving towards (their) own posts when an alert area domination patrol spotted and engaged the intruders," he said.

"The firefight between Pakistan and own troops continued for approximately half an hour, after which the intruders retreated back towards their side of the Line of Control."

He said India would take up the issue with Pakistan at a military flag meeting and also at a diplomatic level.

In 1999, Pakistan-backed Islamist infiltrators occupied the Kargil heights in north of Indian Kashmir, and India lost hundreds of troops before re-occupying the mountains after bitter fighting that almost triggered a fourth war.

Indian military officials say the frequency of cross-border clashes has increased in recent weeks, with at least half a dozen ceasefire violations over the past week alone.

"I would say generally the picture has been a bit bleak," said Uday Bhaskar, an Indian military commentator and former director of the Institute for Defence Studies and Analyses, referring to relations between India and Pakistan.

"This incident only reiterates a certain pattern as far as the bilateral relationship is concerned."

He cited an apparent slowdown in Islamabad's commitment to granting India most-favoured-nation trading status and a recent visit to India by an adviser to Pakistan's prime minister whose comments infuriated the Indian government.

(Writing by John Chalmers; Additional reporting by Matthias Williams; and by Katharine Houreld in Islamabad; Editing by Raju Gopalakrishnan)

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