The governor of the province confirmed that troops from across the Afghan border raided a village, calling the incident "a direct assault" on sovereignty.
The raid killed at least 20 people, Owais Ahmed Ghani, governor of the North West Frontier Province said in a statement.
"Innocent citizens of Pakistan including women and children were martyred," he said.
Pakistan's army said there had been an attack.
"We confirm an attack was carried out in a border village and we are gathering details," Major Murad Khan, a Pakistan army spokesman said.
A spokesman for the Nato-led International Security Assistance Force (Isaf) in Afghanistan said he was not aware of such an operation.
He said Isaf does not have a mandate to attack outside the borders of Afghanistan unless its troops come under fire from within Pakistan, in which case the force can respond with artillery.
The US-led coalition in Afghanistan also said earlier that it was unaware of any such incident.
Mowaz Khan, a local official in the South Waziristan tribal district, claimed the helicopters dropped Isaf soldiers in the border village of Jalal Khel and flew them back after the attack.
One witness, Habib Khan Wazir, said a helicopter landed outside a house before dawn. He said the troops came out and fired on people outside and inside a house.
Bombing in Swat
Earlier on Tuesday, Pakistani military jets bombed an area in the nearby Swat valley killing at least 10 people and wounding dozens, a security official said.
The bombing came despite an offer of truce during the current Muslim fasting month of Ramadan announced by the government at the weekend.
A senior security official said fighter jets bombed Ghat Peochar area following intelligence that leaders of pro-Taliban cleric Mullah Fazlullah's group were hiding there.
"We are not sure if any leader was among 10 killed in the air strike," the official, who spoke on condition of anonymity, told AFP news agency.
Major General Athar Abbas, the military's chief spokesman, confirmed the bombing but said he did not have details of casualties.
Fazlullah's spokesman, Mulsim Khan, earlier on Tuesday claimed to be holding two Chinese telecoms engineers and their entourage who were kidnapped four days ago from neighbouring Dir district.
He claimed the latest air strike killed only civilians and that none of the group's fighters were hurt.
The engineers went missing along with their local driver and a security guard near the Afghan border where they had been checking an installation.
Fazlullah, who is also known as Mullah Radio for using illegal FM channels to propagate his ideas, has been leading a violent campaign to enforce Sharia (Islamic law) in the Swat valley since 2007.