Pakistan said the MiG-21 and MiG-27 jets had violated its air space - a claim denied by India, which said one jet had crashed following mechanical problems and the other had been shot down as it went to investigate. One of the pilots is being held by the Pakistani forces.
It is the first time that Indian aircraft have been lost in combat since the 1971 war with Pakistan and prompted the Indian Prime Minister, Atal Behari Vajpayee, to call an emergency meeting of his cabinet.
The conflict between the two nuclear powers has caused concern in capitals world-wide. Britain has joined the United States, China, the United Nations and the European Union in calling for the two sides to show restraint.
India's National Security Adviser, Brajesh Mishra, said: "When we went in for air strikes, we went in knowledge there could be damage to our aircraft." Islamabad said it wanted to defuse the situation and was seeking UN intervention.
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