Indian pilot captured by Pakistan to be released on Friday as a 'peace gesture', says Imran Khan

An Indian pilot captured by Pakistan will be released tomorrow as a "peace gesture", the Pakistani prime minister has said.

Imran Khan made the announcement on Thursday as he addressed parliament in Pakistan, convened to discuss the latest situation amid rising tensions with India over the disputed territory of Kashmir.

It comes a day after Islamabad said it shot down two Indian warplanes and captured a pilot in the disputed Himalayan region of Kashmir.

The two nations exchanged gunfire through the night as tensions continued to grip the contested area.

Mr Khan added that he had tried to reach his Indian counterpart Narendra Modi on Wednesday with a message that he wants to de-escalate tension.

He did not say how India responded to his initiative but reiterated his offer for talks to New Delhi, saying this is the only way to solve all issues.

It follows escalating conflict between India and Pakistan that began with a February 14 suicide car bombing killed more than 40 Indian paramilitary personnel.

India responded with an air strike on Tuesday inside Pakistan, the first such raid since the two nations' 1971 war over territory that later became Bangladesh.

Following Wednesday's aerial skirmish, Pakistan said it had shot down two Indian aircraft, one of which crashed in the Pakistan-held part of Kashmir and the other in India-controlled Kashmir.

India acknowledged one of its MiG-21s, a Soviet-era fighter jet, was "lost" in skirmishes with Pakistan. The Ministry of External Affairs said it "strongly objected to Pakistan's vulgar display of an injured personnel of the Indian Air Force", and that it expects his immediate and safe return.

India also said it shot down a Pakistani plane, something Islamabad denied.

Pakistan's military later circulated a video of a man who identified himself as the Indian pilot, sipping tea and responding to questions, mostly by saying: "You know I can't answer that."

He appeared in good health as he was questioned about his home town, his aircraft and his mission.

Indian and Pakistani officials reported small-arms fire and shelling along the Kashmir region into Thursday.

The violence on Wednesday marked the most serious escalation of the long-simmering conflict since 1999, when Pakistan's military sent a ground force into Indian-controlled Kashmir at Kargil. That year also saw an Indian fighter jet shoot down a Pakistani naval aircraft, killing all 16 on board.

Kashmir has been claimed by both India and Pakistan since almost immediately after their creation in 1947. The countries have fought three wars against each other, two directly dealing with the disputed region.