Nine died near the city of Sialkot and more than 40 were wounded on Friday, less than a week after high-level talks were aborted amid a row over Kashmir.
India said at least four villagers were killed in Indian-administered Kashmir by Pakistani fire.
“We will counter this situation on all levels. If war is forced on us we will take good care of them,” Defence Minister Khawaja Asif told AFP.
“Absolutely we have the right to retaliate, and retaliate in kind, retaliate in full force,” Asif said after he visited the wounded in hospital.
He added: “If India crosses the international border and aggression is committed again, we will defend our homeland and inflict much more damage than 1965,” Asif said.
The 1965 war between the two countries took place over two weeks in September, and each September 6 Pakistani media eulogises the army for thwarting Indian “aggression”.
Prime Minister Nawaz Sharif would raise the issue of continued aggression at a UN General Assembly session next month, Asif said.
A meeting between the Indian and Pakistani national security advisers in New Delhi on Sunday was called off at the last minute following a dispute about whether the agenda should include Indian occupied
Shelling across the Line of Control (LoC) and the “working boundary” in Punjab — has been on the rise this month.