War clouds loomed over nuclear neighbours India and Pakistan, with fighter jets of the two nations engaging in aerial battle for the first time since they went to war in 1971.
Pakistan said it had launched air strikes and captured an Indian pilot, and both sides claimed to have downed each other's planes.
In a measure of how grim the situation was on the ground, Pakistan closed down its entire airspace and India shut down five airports, forcing carriers, including Singapore Airlines, to reroute flights. Ground troops from the two countries also exchanged fire for at least two hours.
With hostilities appearing to spiral out of control, the international community called for restraint, and Pakistan Prime Minister Imran Khan offered dialogue.
He said in a televised statement: "If this (situation) escalates, it will no longer be in my control or in (Prime Minister) Narendra Modi's. We invite you for dialogue... better sense must prevail."
Meanwhile, India summoned Pakistan Deputy High Commissioner Syed Haider Shah and lodged a diplomatic protest over the air strikes.
The Ministry of External Affairs also asked for the safe return of the pilot, identified as Wing Commander Abhinandan Varthaman.
The sharp escalation in tensions comes after India launched air strikes on a camp belonging to the Jaish-e-Mohammed (JeM) on Tuesday, claiming it was a preemptive strike on a group that was planning more terror attacks against it. JeM was involved in a suicide attack that killed 40 Indian paramilitary soldiers on Feb 14. India has accused Pakistan of having a direct role.
Both sides also claimed aerial success yesterday. Pakistan said Indian jets had entered Pakistani airspace and that its own air strike was to show it could retaliate. "The sole purpose of this action was to demonstrate our right, will and capability for self-defence. We do not wish to escalate, but are fully prepared if forced into that paradigm," said its Ministry of Foreign Affairs.
While Islamabad said it had targeted open spaces, India said Pakistan's jets had attacked its military installations.
Mr Raveesh Kumar, a spokesman for India's Ministry of External Affairs, said: "Due to our high state of readiness and alertness, Pakistan's attempts were foiled successfully.''
He said Indian Air Force jets were scrambled as soon as the Pakistani planes were detected and that in the dogfight, a Pakistan Air Force fighter aircraft was shot down by a MiG-21 Bison of the Indian Air Force. "The Pakistani aircraft was seen by ground forces falling from the sky on the Pakistan side. In this engagement, we have, unfortunately, lost one MiG-21. ''
The two countries have fought three wars and had one more limited conflict, and their relations remain tense.
Yesterday, countries around the world called for calm.
Singapore's Foreign Affairs Ministry said it noted the escalating of tensions with "deep concern", and called on both parties to ensure the safety of all civilians.
United States Secretary of State Mike Pompeo urged the two nations "to avoid escalation at any cost", and for their foreign ministers to talk. He asked Pakistan to take "meaningful action against terrorist groups operating on its soil".
Chinese Foreign Ministry spokesman Lu Kang said: "We hope India and Pakistan can exercise restraint, take initiatives that are conducive to promoting dialogue, meet halfway and make active efforts for lasting peace and stability in South Asia."
In a joint statement, 21 opposition parties in India also voiced their discomfort: "The leaders condemned the Pakistani misadventure and expressed deep concern for the safety of the missing pilot."