AFP, KASHMIR: Hundreds of angry residents clashed with government forces Thursday in the main city of Indian-administered Kashmir after a firefight left three suspected rebels and a young woman dead, police and witnesses said.

Counterinsurgency police and federal paramilitary forces surrounded the Batamaloo neighbourhood of Srinagar after midnight following a tip-off that armed militants were hiding inside a residential house, triggering an exchange of fire.

Three suspected rebels, believed to be locals, were killed in the firefight that lasted several hours, police announced on Twitter.

"One young woman also died during the encounter," a police officer told AFP.

"The woman was caught in the crossfire. Her death is unfortunate," director general of police Dilbagh Singh told reporters.

A paramilitary trooper was also injured during the firefight, Singh said.

As news of the deaths spread hundreds of residents took to the streets, throwing stones at government forces who fired tear gas and metal pellets.

The crowd shouted slogans, such as "Long live Pakistan" and "We want freedom", according to an AFP photographer at the scene.

No injuries were immediately reported from the clashes.

Armed encounters between rebels and government forces are frequent in the territory, but rare in the capital city.

The last such firefight occurred in June, and left three local rebels dead and 15 houses destroyed in the heart of Srinagar.

Thursday`s deaths came a day after similar protests in northeastern Kashmiri town Sopore, where Irfan Ahmed Dar, 26, was found dead hours after he was detained by police.

Dar`s family allege police tortured and killed him, later dumping his body in an open area.

Police however claim Dar was an overground associate of anti-India rebels and escaped from police custody before he was found dead.

Dar`s body was not released to his family, and officers buried him in a graveyard reserved for slain rebels.

At least 192 rebels, 73 government forces personnel and 47 civilians have been killed in armed violence this year across the disputed territory also claimed by Pakistan which administers a part of it.

India and Pakistan have exchanged small arms fire and mortar shells almost daily for months across their disputed border in Kashmir, leading to the deaths of soldiers and civilians on both sides.

On Wednesday an Indian soldier was killed during cross border firing in the south.

Anxiety and anger has deepened in the restive Himalayan region since August last year when New Delhi revoked its semi-autonomous status and brought it under direct federal rule.