"There has been no surgical strike by India, instead there had been cross border fire initiated and conducted by India which is existential phenomenon," Pakistan army said in a statement.
"As per rules of engagement same was strongly and befittingly responded by Pakistani troops.
"The notion of surgical strike linked to alleged terrorists bases is an illusion being deliberately generated by Indian to create false effects. This quest by Indian establishment to create media hype by rebranding cross border fire as surgical strike is fabrication of truth," it said.
Pakistan has made it clear that if there is a surgical strike on Pakistani soil, same will be strongly responded, the statement said.
Pakistan Defence Minister Khawaja Asif said that India's claim was not true.
"India violated LoC last night and only used light weapons in the firing," he said, adding Pakistan forces gave befitting reply to Indian firing.
Pakistan Air Force has also rejected India's claim of surgical strikes.
"Pakistan is ready to respond to any such strikes," PAF said in a statement.
Earlier Prime Minister Nawaz Sharif strongly condemned the "unprovoked and naked aggression" by India along the LoC and said Pakistan's armed forces are fully capable of defending the territorial integrity of the country.
Sharif also warned that Pakistan's intent for peaceful neighbourhood should not be mistaken as its weakness.
"Prime Minister Nawaz Sharif has strongly condemned the unprovoked and naked aggression of Indian forces resulting in martyrdom of two Pakistani soldiers along the LoC," the statement said.
"Our intent for peaceful neighbourhood should not be mistaken as out weakness and our valiant forces are fully capable of defending the territorial integrity of country and can thwart any evil design made to undermine the sovereignty of Pakistan," it said.
In New Delhi, India said it has conducted surgical strikes on terror launch pads in the wee hours of Thursday across the LoC and inflicted significant casualties and heavy damages.
DGMO Lt Gen Ranveer Singh said India shared with Pakistan army details of the surgical strikes which followed “very specific information” that terrorists were positioning themselves in the launch pads along the LoC.
Details of duration of the surgical strikes or when it was conducted or the place was not immediately given.
Pakistani troops had on Wednesday targeted Indian positions with small firearms along the Line of Control in Poonch district.
-- With inputs from Agencies
Time to target Pakistan's jihadi leaders
Former R&AW chief: How we can fix the Pak problem
US Security Advisor calls Doval, condemns Uri terror attack
The implications of the Uri attack
'Revenge is a dish best served cold'