"Instead of issuing belligerent statements by the military and political leaders from across the border and ratcheting up tension, it is advisable for the two countries to discuss all concerns related to the LoC with a view to reinforcing respect for the ceasefire, may be at the level of the Foreign Ministers, to sort out things," Khar said in a statement issued late last evening in Islamabad.

"Rhetoric and ratcheting up of tensions is certainly counter-productive," she said a day after accusing India of engaging in "war-mongering" in the aftermath of the killings of two Indian soldiers by Pakistani troops, which led Indian Prime Minister Manmohan Singh to issue a stern comment that there "cannot be business as usual with Pakistan."

A string of violations of the ceasefire that had been in operation since 2003 along the 742-km LoC over the past 10 days have left two Indian soldiers dead.

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Speaking at an event organised by think-tank Council on Foreign Relations (CFR) in New York last evening, Khar said, "We will be open to a discussion and a dialogue at the levels of the Foreign Ministers to be able to resolve the issue of cross LoC incidents and also to recommit ourselves to respect for the ceasefire because Pakistan is fully committed to respect for the ceasefire 2003."

She said the LoC clashes and killing of soldiers has "unfortunately created questions but we still believe that dialogue must be the means to resolve this or any issue."

Earlier, the Directors General of Military Operations of the two sides spoke on a hotline and 'agreed on the need to reduce tension on the LoC", a Pakistani military statement said in Islamabad.

Khar said Pakistan and India were important countries of South Asia and it was "imperative that they demonstrate requisite responsibility for ensuring peace by addressing all concerns through dialogue".

Pakistan, Khar said, was "saddened and disappointed at the continued negative statements emanating from India both from the media as well as certain Indian leaders".

Islamabad had observed a "measured and deliberate self-restraint" in its public statements on India and this was been done in view of the interest of peace in the region, she said.

"We have invested hugely in the dialogue process and have worked energetically to keep the dialogue process moving forward in a sustained and constructive manner. Pakistan has gone out of the way to build a constructive relationship with India," she said.

India and Pakistan resumed their dialogue process in early 2011 after a gap of over two years in the wake of the Mumbai attacks, which were blamed on the Pakistan-based Lashkar-e-Taiba terror group.

The string of clashes along the LoC since January 6 marked the most serious violations of the ceasefire put in place in late 2003. The two sides have traded angry charges over the violations. The High Commissioners of both countries were summoned by the foreign ministries for lodging protests.

"Continued tension along the LoC is not in the interest of peace and stability in the region," Khar said.

Responding to a question at CFR on India-Pakistan ties, Khar said as important countries within South Asia, both nations must show "very responsible behaviour and must show their complete commitment to pursuing normalisation of relations and peaceful co-existence for heaven's sake.

"These recent (LoC) incidents have been extremely unfortunate... I hope this will pass," she said.

Repeating her remarks which she made a day earlier at an event at the Asia Society, Khar said Pakistan had investigated but found no evidence that an Indian soldier Lance-Naik Hemraj had been beheaded by Pakistani troops.

While denying that Pakistani troops had killed two Indian soldiers, Khar said there was "another murdering" of one of its people across the LoC on January 10.

Khar said before the tensions at the LoC, the two nations had moved forward towards normalising ties to quite an extent, improving atmospherics and continuing with the peace process.

"I hope for the future also we will continue to do rather well," she said, adding by normalising trade relations with India, Pakistan had wanted to send a "very serious message" that "we mean business, we walk the talk of normalisation."

Trade ties between the nations would build "stakeholders in each others future" and because of bilateral investments people would have been "very unhappy on incidents like the one we just saw, any talk of hostile behaviour of any type."

Khar again pointed fingers at India over the reactions being made by its leadership on the LoC crisis while praising Pakistan's response, which she described as "mature".

"I am rather disappointed by that. You see a lot of very hostile negative statements which have come out... The only thing I am concerned about when we allow this to become domestic politics issue," she added.

Khar said there are naysayers on both sides of the border who do not want the peace process to continue.

"So they will always encourage you to go hard on the rhetoric and just ratchet up the tension. Some people find it in their interest, we do not. We must not fall prey to that.

In Pakistan we have not fallen prey to the requirement of ratcheting it up."

India and Pakistan have spent the last 60 years on the narrative of hostility.