India on Tuesday pulled out of a key regional summit in Pakistan citing an increase in cross-border terrorist attacks, as tension between the nuclear-armed neighbours escalates.

The Indian government has accused Pakistan-based militants of launching a deadly assault on an army base in Kashmir this month that killed 18 soldiers.

Regional superpower India said it has conveyed its decision not to take part in the South Asian Association for Regional Cooperation (SAARC) summit to Nepal, the current SAARC Chair.

"India has conveyed to current SAARC Chair Nepal that increasing cross-border terrorist attacks in the region...have created an environment that is not conducive to the successful holding of the 19th SAARC Summit," the foreign ministry said in a statement.

"In the prevailing circumstances, the government of India is unable to participate in the proposed summit in Islamabad."

The SAARC summit, which brings together eight member states in the region, is scheduled to be held in Islamabad on November 9-10.

Addressing the UN General Assembly on Monday, Indian Foreign Minister Sushma Swaraj said: "Pakistan remains in denial. It persists in the belief that such attacks will enable it to obtain the territory it covets.

"My firm advice to Pakistan is: abandon this dream. Let me state unequivocally that Jammu and Kashmir is an integral part of India and will always remain so."

Kashmir has been split between India and Pakistan since the end of British rule in 1947. Both claim the disputed Himalayan territory in its entirety and have fought two wars over it.

The Indian army has blamed the latest attack, in which 18 soldiers and four attackers were killed, on the Pakistan-based militant group Jaish-e-Mohammad.

The group was also implicated in an audacious attack in January on an Indian air force base in Pathankot in the northern state of Punjab, that left seven soldiers dead.

Pakistan responded Monday by calling Swaraj's speech a "litany of falsehoods" that distorted history, and denied its forces had aided the army base attack.

"These allegations are designed principally to deflect global attention from the brutalities being perpetrated by India's over half a million occupation force against innocent and unarmed Kashmiri children, women and men," said a statement by its foreign office released late Monday.

"Jammu and Kashmir never was and can never be an integral part of India. It is a disputed territory, the final status of which has yet to be determined in accordance with several resolutions of the UN Security Council."

More than 80 people have been killed in ongoing unrest in Kashmir since July 8 when a young militant leader was shot dead by Indian soldiers, sparking one of the deadliest bouts of violence to hit the region in decades.

Several rebel groups have fought an estimated 500,000 Indian forces deployed in Kashmir, demanding independence for the Muslim-majority region or its merger with Pakistan.

Tens of thousands of people have died in the fighting, most of them civilians.