The BBC's Secunder Kermani in Islamabad has asked the Pakistan military whether they're pushing the two sides towards war. Here's their reply:

People in Kashmir are worried the tensions will lead to a major military confrontation - with them in the middle.

For all those just joining our live coverage, Pakistan says it has shot down two Indian Air Force jets.

A Pakistani spokesman said one plane had fallen inside Pakistani territory and pilots had been arrested. India however says all pilots are accounted for.

It's a major escalation of simmering tensions between the nuclear-armed neighbours and comes a day after India launched air strikes in Pakistani territory, it says on militant bases.

The trigger was a deadly attack on 14 February when a militant killed more than 40 Indian troops in disputed Kashmir.

The BBC's Sameer Hashmi reports that stock markets in both India and Pakistan are trending lower following the escalation.

We have more detail about the Indian pilots said to have been captured by Pakistan.

Army spokesman Asif Ghafoor said that after Pakistan fighter jets carried out "strikes" - exactly what they did remains unclear - two Indian air force jets crossed the de facto border that divides Kashmir."Our jets were ready and we shot both of them down," he said. "All three personnel have been arrested. One was injured and is under treatment at a military hospital."

India is denying this, saying all its pilots and planes are accounted for.As with most developments on this story, each side has a different version of events.

Tensions between the neighbours go right back to 1947.

Image source, Getty Images

Oct 1947: First war between India and Pakistan over Kashmir just two months after they become independent nations.

Aug 1965: The neighbours fight another brief war over Kashmir.

Dec 1971:India supports East Pakistan's bid to become independent. The Indian air force conducts bombing raids inside Pakistan. The war ends with the creation of Bangladesh.

May 1999: Pakistani soldiers and militants occupy Indian military posts in Kargil mountains. India launches air and ground strikes and the intruders are pushed back.

Oct 2001: Attack on the state assembly in Indian-administered Kashmir kills 38. Two months later, an attack on the Indian parliament in Delhi leaves 14 dead.

Nov 2008: Co-ordinated attacks on Mumbai's main railway station, luxury hotels and a Jewish cultural centre kill 166 people. India blames Pakistan-based group Lashkar-e-Taiba.

Jan 2016: Four-day attack on Indian air base in Pathankot leaves seven Indian soldiers and six militants dead.

Sept 2016: Attack on army base in Uri in Indian-administered Kashmir kills 19 soldiers.

Sept 2016: India says it carried "surgical strikes" on militants in Pakistani Kashmir. Islamabad denies strikes took place.

There are Indian reports that a Pakistan F-16 fighter jet has been shot down. But Maj Gen Ghafoor denied that was the case and said no F-16 was used in the operation.

The Pakistan military spokesman continued that Pakistan "engaged" six targets across the Line of Control, the de facto border that divides Indian and Pakistan-administered Kashmir."But we want peace so we decided we won't attack any military target. We ensured there was no loss of life or collateral damage. We logged six targets, we logged their supply depots, but [we] didn't want to do it at the cost of peace in the region, so we did air strikes in the open ground."It appears he's saying that Pakistani aircraft chose not to bomb six targets it had identified.

• India and Pakistan have disputed the territory since their independence in 1947
• They have fought two wars and a limited conflict over it
• It is regularly described as one of the world's most dangerous flashpoints - as both sides are nuclear-armed
• India and Pakistan both claim all of the territory but only control part of it
• An insurgency on the Indian-administered side began in the late 1980s and India has long accused Pakistan of supporting militants that attack its forces
• Pakistan denies this and says India uses brutal tactics to put down protests and control separatists

Indian airline Vistara says flights to and from three cities in northern India - Amritsar, Srinagar and Jammu - are currently on hold due to "airspace restrictions".

Maj Gen Ghafoor says that Pakistan "had no alternative to respond" to Indian air strikes yesterday on its territory.

He says that India carried out "aggression" and claimed to have killed hundreds of militants.Pakistan has said the bombs caused no damage or casualties.

A briefing from Pakistani military spokesman Maj Gen Asif Ghafoor is under way where he is providing details on what unfolded this morning.

After the Pulwama attack, tensions escalated even further when on Tuesday, India said it launched air strikes against militants in Pakistani territory.

The incident saw conflicting claims from India and Pakistan.

Pakistan said IAF planes flew into Pakistani airspace were forced back without causing damage or casualties. India however said the strikes killed large numbers of militants.

There is lots of speculation about what could happen next.

But analyst Ankit Panda says escalation is not assured and it's likely an overarching policy of restraint will remain in place.

Image source, Reuters

Tensions between India and Pakistan escalated when on 14 February, a suicide attack on an Indian security convoy in Pulwama, in Indian-administered Kashmir killed more than 40 paramilitary police.

That bombing was the deadliest attack on Indian forces in the region for decades.

The attack was claimed by a Pakistan-based militant group, Jaish-e-Mohammad (JeM) but Pakistan denied it was involved. India however said its neighbour had a "direct hand" in the attack and accused it of providing sanctuary to the militant group.

We are hearing that Pakistani airspace has been shutdown for commercial airlines.

A senior Civilian Aviation Authority official told BBC Urdu that planes in the air have been told to divert to the city of Karachi or return to their point of departure.

In a statement, Pakistan's foreign ministry said the country's air forces "undertook strikes across Line of Control from within Pakistani airspace".

"This was not a retaliation to continued Indian belligerence. Pakistan has therefore, taken strikes at non military target, avoiding human loss and collateral damage. Sole purpose being to demonstrate our right, will and capability for self-defence.

"We have no intention of escalation, but are fully prepared to do so if forced into that paradigm," the statement said.

We are starting live coverage after a major escalation in tensions between India and Pakistan.

Pakistan has said it has shot down two Indian fighter jets in its territory and captured an Indian pilot.

India has not confirmed this.

Today's events follow nearly two weeks of growing tension, after a militant attack killed more than 40 Indian troops in disputed Kashmir on 14 February.