While Pakistan denied any involvement in the post-midnight attack in Poonch sector, Indian leaders used tough language to denounce the killings with Congress president Sonia Gandhi saying India won't be "cowed down by such blatant acts of deceit".
"The entire Congress as indeed the entire country stands by them (soldiers)," she said in a statement, and asked the "government to take appropriate action".
Five soldiers were killed when the attackers, including men in Pakistani military uniform, barged into Indian territory and ambushed an army patrol at Chakan-da-Bagh sector of the Line of Control (LoC), which divides Kashmir between India and Pakistan. One soldier was injured.
The slain soldiers are Naik Prem Nath, Lance Naik Shambu Saran, Sepoy Vijay Kumar Ray, Sepoy Raghunandan Prasad and Naik Pundalik Mane.
Their bodies will be brought to Jammu Wednesday and then flown to their respective hometowns.
Army chief General Bikram Singh will visit Poonch Wednesday to review the security situation there in the wake of the ambush.
Defence Minister A.K. Antony told parliament that about 20 "heavily armed terrorists" and others in Pakistani military uniform were involved in the bloody ambush. He condemned the "unprovoked incident" and said the army was ready to take all steps to uphold the sanctity of the LoC.
The attack took place around 400 metres inside Indian territory.
A wounded soldier was airlifted to Jammu for specialised treatment.
A source in Jammu told IANS that the Pakistanis withdrew after the killings.
It was the worst border clash in Kashmir after January when two Indian soldiers were killed in Mendhar sector of the LoC. One of the soldiers was then beheaded while the body of the other was mutilated.
The latest killings sparked off angry responses in India, where there have been high expectations from a possible meeting between Prime Minister Manmohan Singh and Nawaz Sharif on the sidelines of the UN General Assembly in September.
Even before the Pakistani foreign ministry denied involvement in the incident, India summoned Pakistan's Deputy High Commissioner Mansoor Ahmad Khan in New Delhi and lodged a strong protest.
The Bharatiya Janata Party (BJP) asked the government not to talk with Pakistan. BJP leader Arun Jaitley said India should give "a befitting reply". His colleague M. Venkaiah Naidu accused the government of being "very soft on Pakistan".
Samajwadi Party leader Mulayam Singh Yadav, a former defence minister, said both Pakistan and China were not to be trusted. Jammu and Kashmir Chief Minister Omar Abdullah warned that such "incidents don't help efforts to normalise or even improve relations with Pakistan".
External Affairs Minister Salman Khurshid said India will take steps necessary in its national interest in the wake of the ambush.
"Whatever we feel is necessary in the national interest, those steps will be taken," Khurshid said.
Activists of Bharatiya Janata Yuva Morcha protested outside Antony's residence following the attack.
In Islamabad, the military denied killing the Indian soldiers. "No such incident has taken place on the LoC," an official with the army's Inter-Services Public Relations said. Later, the foreign office came out with a strong denial of Pakistani official's complicity in the ambush.
"Pakistan rejects allegations of an attack across the LoC in Poonch sector in which five Indian soldiers were claimed to have been killed," it said. "These are baseless and unfounded allegations. Our military authorities have confirmed there had been no exchange of fire that could have resulted in such an incident," it said.
Pakistan "remains committed to the ceasefire agreement of 2003 which is an important Confidence Building Measure and should be respected in letter and spirit.
"Pakistan is committed to a constructive, sustained and result-oriented process of engagement with India, and looks forward to an early resumption of the dialogue process."
Since 2003, when India and Pakistan declared a ceasefire, guns have mostly been silent on the LoC. But troops of the two countries sometimes exchange fire.