New Delhi, Jan 15 (IANS): The Indian Army is prepared to face all internal and external challenges faced by the country, army chief General Bikram Singh said Tuesday amid continued tensions with Pakistan over the brutal killing of two Indian soldiers along the Line of Control (LoC).

"I am proud to say that the Indian Army has been able to fulfil the country's expectations. Our country has been facing both internal as well as external challenges and let me assure you, that the Indian Army is ready for all the challenges," Bikram Singh said in his address on the occasion of the 65th Army Day here.

He also paid homage to martyrs at the Amar Jawan Jyoti - the martyrs memorial at India Gate here. Gallantry awards were presented to soldiers.

Bikram Singh had Monday described the killing of two Indian soldiers - one of whom was beheaded - by Pakistan troops as "an unpardonable act" and said his forces reserve the "right to retaliate".

Army Day is celebrated Jan 15 every year in recognition of Lieutenant General K.M. Cariappa's taking over as the first commander-in-chief of the Indian Army from Sir Francis Butcher, the last British commander, in 1948.