(Bloomberg) -- Indian fighter jets violated an agreed border between the two countries, the Pakistani army said on Tuesday, as tensions between the nuclear-armed rivals rose following a major terrorist attack in Kashmir earlier this month.

“Indian aircraft intruded from Muzafarabad sector," Major General Asif Ghafoor, spokesman of the Pakistan Armed Forces, said in a Twitter post, adding that it was dealt with by the Pakistan Air Force. “Facing timely and effective response from Pakistan Air Force released payload in haste while escaping which fell near Balakot. No casualties or damage.”

Indian defense ministry spokesman Colonel Aman Anand did not respond to a call and text for comment. Indian foreign ministry spokesman Raveesh Kumar declined to comment when reached by phone on Tuesday morning.

Relations between the historic arch-rivals has been extremely tense since a suicide car bombing, claimed by the Pakistan-based terrorist group Jaish-e-Mohammed, on Feb. 14 in Kashmir killed 40 members of India’s security forces. Jaish-e-Mohammed is a United Nations designated terrorist group.

The Indian rupee weakened offshore, with one-month non-deliverable forward trading at 71.32 a dollar before local markets open.

Indian Prime Minister Narendra Modi, who faces a general election in the coming months, is under enormous pressure after blaming Pakistan for the worst attack on security forces in Kashmir in several decades, and markets reacted after Modi pledged a “befitting reply.”

Islamabad has denied any role in the attack. Pakistani Prime Minister Imran Khan vowed to retaliate against India in a televised speech on Feb. 19 if New Delhi launched any sort of military response. Pakistan’s army chief, General Qamar Javed Bajwa, in the past few days visited troops along the “Line of Control,” the de facto border in Kashmir, to see their preparedness, according to the military media wing Inter-Services Public Relations.

Spy Agency

The Indian Army said on earlier on Feb. 19 that it had killed a Jaish-e-Mohammed leader in Kashmir who was a Pakistani national with links to that country’s Inter-Services Intelligence, or ISI, the main spy agency for the government in Islamabad.

Modi had previously said the country’s defense forces have been given the freedom to respond.

Both India and the U.S. see Pakistan as providing safe haven for terrorist groups and point to the fact that the leadership of groups such as Jaish-e-Mohammed and Lashkar-e-Taiba, which carried out the Mumbai attacks in 2008, still live freely in Pakistan.

©2019 Bloomberg L.P.