The clash occurred a day after India had warned of retribution after losing three soldiers due to firing by Pakistani troops.
"Three Pakistani soldiers valiantly sacrificed their lives at the Line of Control while responding to Indian unprovoked firing," army said.
Those killed were identified as Captain Taimoor Ali Khan, Havaldar Mushtaq Hussain and Lance Naik Ghulam Hussain.
The statement also claimed that seven Indian troops were killed in retaliatory fire.
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However, media reports said that up to 10 civilians were killed today due to firing by Indian troops.
Meanwhile, Pakistan yesterday rejected as "false" and "baseless" the charges that the body of an Indian soldier was mutilated by Pakistani soldiers in a cross LoC-attack.
Foreign Office (FO) spokesperson Nafees Zakaria in a series of tweets said the reports about the mutilation were aimed at maligning Pakistan.
"Pakistan strongly rejects the false & baseless Indian media reports regarding the alleged mutilation of an Indian solider on the LoC. These reports are a fabrication and a blatant attempt to malign Pakistan," he had said.
He had said the Pakistan Army never supported any such action.
However, he said, Pakistan is fully prepared and ready to respond to any misadventure across the LoC, Working Boundary or the International Border.
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