Dozens have been killed in border clashes in recent months along the Line of Control, the heavily militarised de facto border dividing the Himalayan territory, leaving residents terrified.

This month, shelling and gunfire along the frontier dividing Indian-held Kashmir from Pakistan's Punjab province -- known as the working boundary -- killed at least 16 people, while 80,000 people on the Indian side fled their homes to escape the violence.

But the Pakistani military said late Tuesday that the two sides had pledged to respect the conditions laid out in a 2003 ceasefire inked by the rivals, following a call on the hotline between the militaries.

Both militaries "agreed to fully implement the ceasefire understanding of 2003 in letter and spirit forthwith and to ensure that henceforth the ceasefire will not be violated by both sides," the Pakistani side said in a statement.

On Wednesday officials on the Indian side of the working boundary said the situation was returning to normal.

"Most of the villagers who had fled have returned to their homes. The situation is normal at present. There is no one in the relief camps now, but we have kept them open just in case something happens again," Hemant Kumar Sharma, a local commissioner, told AFP from Jammu.

The flare-up along the working boundary came after India suspended military operations against Kashmir rebels for the Muslim holy month of Ramadan that began earlier this month. Militants have rejected the truce offer.

Kashmir has been divided between the arch-rivals since the end of British colonial rule in 1947. Both claim the former Himalayan kingdom in full.

India has about 500,000 soldiers in the part of Kashmir it controls, where scores of armed groups are fighting for independence or a merger with Pakistan.

New Delhi accuses Pakistan of fuelling the insurgency that has left tens of thousands of civilians dead, a charge Islamabad denies, saying it only provides diplomatic support to Kashmiris' right to self-determination.

Independently confirmed data on cross-border clashes is virtually non-existent, but figures given by both sides show a powerful, sustained surge in violence along the LoC in the past two years that has intensified since the start of 2018.