People assess the damage on a road in an earthquake-hit area on the outskirts of Mirpur on Wednesday. Rescue workers battled to reach people affected by a shallow earthquake that rocked northeast Pakistan a day earlier, killing at least 25 people and injuring hundreds more as it tore roads apart and felled buildings. Photo: AFP

The death toll has risen to at least 25 people from an earthquake that struck Pakistan-controlled Kashmir, officials said on Wednesday, as residents mourned their dead and rescue work continued.

Tuesday's earthquake levelled homes and shops and split open roads in an area between the towns of Jhelum and Mirpur to the north, part of which is in Pakistan's portion of the disputed territory of Kashmir.

"The situation is slowly returning to normal, the level of panic is now less among the people, although an aftershock was felt at night," said Sardar Gulfaraz Khan, a police deputy inspector general.

Most of the damage happened in villages where old houses collapsed, Khan said.

In a town in Mirpur district, more than 200 people gathered to attend the funeral of a 1-1/2-year-old child who was killed in the earthquake. Women wailed around the bed where the child's body lay covered in a blanket.

Another child in the town was buried the same morning after a wall collapsed on her.

"All of sudden I received a call from my father that there was an earthquake and my little sister is badly injured," her brother Mohammad Hameed said.

"She was injured and [now] she has left us."

Pakistan's National Disaster Management Authority (NDMA) said 25 people have been killed, nearly all in Pakistani Kashmir, and more than 450 people injured.

Many people from the area slept outdoors overnight and some were returning home on Wednesday to collect belongings and inspect damage.

Lt General Muhammad Afzal, the NDMA's chief, said the authority would bring in 200 family-sized tents for temporary shelters, kitchen sets, blankets and 50,000 bottles of water.

Troops and other emergency responders carried out rescue operations through the night, with engineers starting repairs on a key roadway that was severely damaged, the Pakistan Army's communications arm said.

Afzal said the road would reopen by Thursday evening. Three bridges were also damaged.

The earthquake disrupted power to the region, but it had been restored by midday on Wednesday, NDMA said.