Algeria said on Wednesday that Moroccan bombardment had killed three of its citizens in the border area between Mauritania and the disputed territory of Western Sahara and warned it would "not go unpunished".
Monday's incident underscores the risks of escalation between the powerful North African rivals after months of deteriorating relations tied to the conflict in Western Sahara.
"Several elements point to the involvement of the Moroccan occupation forces in Western Sahara in the cowardly assassination," the presidency said. It added that the three were in a truck driving to Mauritania for trade.
Morocco made no immediate comment. After images of a burnt-out vehicle circulated on social media on Tuesday, Mauritania said there had been no bombardment on its soil.
Algeria is the host and main supporter of the Polisario Front, which seeks the independence of Western Sahara from Morocco, which holds most of the territory and regards it as its own.
Last year, after an incident near the border crossing between Western Sahara and Mauritania, the Polisario declared a resumption of its armed struggle against Morocco after a three-decade truce.
However, although the Polisario and Algerian media have reported attacks on Moroccan targets, Rabat says it continues to uphold the 1990 ceasefire and only engages in military action in response to attacks.
This year Algeria cut off ties with Morocco, accusing it of failing to live up to its obligations over Western Sahara and of backing a regional independence group inside Algeria. It has also ended gas supplies and cut off its airspace to Moroccan aircraft.
Morocco called those accusations fallacious and absurd, says Algeria was unjustified in cutting ties, and says Algeria is the main party in the Western Sahara conflict.
(Reporting by Yasmin Husseing in Cairo, Hamid Ould Ahmed and Lamine Chikhi in Algiers; additional reporting by Ahmed Eljechtimi in Rabat; Writing by Ahmad Elhamy; Editing by Peter Graff, William Maclean)
