India warned China on Friday that construction of a road near their common border would have serious security implications, as China's Foreign Ministry denied its troops had violated the territory of India's ally, Bhutan.
The stand-off on a plateau next to the mountainous Indian state of Sikkim, which borders China, has ratcheted up tension between the two neighboring giants, who share a 3,500 km (2175 miles) frontier, parts of which are disputed.
According to the Chinese interpretation of events, Indian guards crossed into China's Donglang region early in June and obstructed work on a road on a plateau.
Troops from the two sides then confronted each other close to a strategic valley controlled by China that separates India from Bhutan and gives China access to the so-called Chicken's Neck, a thin strip of land that connects India to its remote northeastern regions.
Bhutan said on Thursday that the road was being built inside its territory.
Indian media have reported that the dispute began when China removed an old Indian bunker.
"India is deeply concerned at the recent Chinese actions and has conveyed to the Chinese Government that such construction would represent a significant change of status quo with serious security implications for India," India's ministry of external affairs said in a statement.