NEW DELHI, Jan 15 (Reuters) - Indian Prime Minister Manmohan Singh said on Tuesday there could be no "business as usual" with Pakistan after a clash last week along the line dividing the arch-rivals in Kashmir in which two Indian soldiers were killed and their bodies mutilated.
Speaking to reporters at a ceremony to mark India's Army Day, Singh said that the killings on Jan. 8 on the Line of Control were a "barbaric act".
His remarks come after the Indian army chief Bikram Singh said India reserved the right to retaliate at a time and place of its choosing and he had instructed his ground commanders to be aggressive in the face of provocation.
Despite each side blaming the other for the worst outbreak of violence in the area since a ceasefire was agreed nine years ago, analysts said a breakdown in ties between the nuclear-armed neighbours was highly unlikely.
Singh has been pushing for a rapprochement with Pakistan, despite opposition not only from the main rival political party but also from within his ruling coalition.
But an official quoted him as saying on Tuesday there could not be "business as usual" after the attacks on the border.
Both armies have lost two soldiers each in the fighting along parts of the 740-km (460-mile) de facto border this month.
One of the Indian soldiers killed last week was decapitated provoking outrage in the country and demands of retribution including from his family which wanted the severed head of the soldier back.
Pakistan has dismissed the Indian allegations as propaganda and instead accused India of violating the ceasefire in Kashmir, cause of two of three wars between the neighbours. (Reporting By Satarupa Bhattacharjya; Editing by Sanjeev Miglani and Jeremy Laurence)