"We will counter this situation on all levels. If war is forced on us we will take good care of them," Defence Minister Khawaja Asif told AFP.
"Absolutely we have the right to retaliate, and retaliate in kind, retaliate in full force," Asif said.
"If India crosses the international border and aggression is committed again, we will defend our homeland and inflict much more damage than 1965," Asif said.
The 1965 war between the two countries took place over two weeks in September, and each September 6 Pakistani media eulogises the army for thwarting Indian "aggression".
A meeting between the Indian and Pakistani national security advisors in New Delhi on Sunday was called off at the last minute following a dispute about whether the agenda should include Kashmir.