Security sources in Pakistan said the overnight strikes involved air-to-ground missile attacks on Taliban military offices and posts in Kabul, Kandahar and Paktia as well as ground clashes in multiple sectors along the border between the Islamic nations.
The Taliban said it launched what it described as retaliatory attacks on Pakistani military installations.
Both sides reported heavy losses, issuing sharply differing figures that Reuters could not independently verify.
"Our cup of patience has overflowed. Now it is open war between us and you (Afghanistan)," Pakistani Defence Minister Khawaja Muhammad Asif said on Friday.
Relations between Kabul and Islamabad have been strained by a long-running dispute over Pakistan's accusation that Afghanistan harbours militants carrying out attacks across the border.
The Taliban have denied the charge and said Pakistan's security is an internal problem.
The strikes on Taliban government installations are a major escalation, and threaten a protracted conflict along the 2600km frontier.
Taliban spokesman Zabihullah Mujahid confirmed Pakistani forces carried out air strikes in parts of Kabul, Kandahar and Paktia but did not give details.
Kandahar is the headquarters of the Taliban and the city where supreme spiritual leader Haibatullah Akhundzada is based.
"Pakistani counter-strikes against targets in Afghanistan continue," a Pakistani government spokesperson, Mosharraf Zaidi, said in a post on X, describing the action as a response to "unprovoked Afghan attacks".
Zaidi said 133 Afghan Taliban fighters were killed and more than 200 wounded, with 27 posts destroyed and nine captured.
Mujahid, the Taliban spokesperson, said 55 Pakistani soldiers were killed and 19 posts seized, while eight Taliban fighters were killed, 11 wounded and 13 civilians injured in Nangarhar province.
Pakistan's military capabilities are vastly superior to Afghanistan.
However, the Taliban are adept at guerrilla warfare, hardened by decades of fighting with US-led forces, before returning to power in 2021.
Clashes between Pakistan and Afghanistan in October killed dozens of soldiers until negotiations facilitated by Turkey, Qatar and Saudi Arabia brought an end to the hostilities.
Pakistan and Saudi Arabia's foreign ministers spoke on Friday to discuss reducing tensions, Riyadh's foreign office said without providing details on whether Riyadh was involved in brokering a ceasefire.
Russia, the only country to formally recognise the Taliban government, called for an end to hostilities and said it would consider mediating talks if asked by both parties, state media reported citing Moscow's foreign ministry.
Pakistan has been on high security alert since it launched air strikes earlier this week that Islamabad said targeted camps of Tehreek-e-Taliban, or Pakistani Taliban, and Islamic State militants in eastern Afghanistan.
Kabul and the United Nations said the strikes killed 13 civilians and reiterated it does not allow militants to operate from its territory.
The Taliban also warned there would be a strong response.
The government of Pakistan's Punjab province said it was on high alert for militant attacks on Friday and had conducted a series of security operations, taking 90 Afghan nationals to holding centres for deportation.
A state-run media outlet from Afghanistan's Nangarhar, Bakhtar News Agency, shared an image of what it said was a battalion of suicide attackers, and quoted an Afghan security source as saying the bombers were equipped with explosive vests and car bombs and were prepared to strike major targets.
Pakistani officials have said in recent days they feared an escalation of militant strikes in urban centres.
with AP
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