SRINAGAR: A battle between government forces and a group of suspected rebels holed up inside a compound in Pampore on the outskirts of Srinagar in held Kashmir (IHK) entered its second day even as security forces launched a fresh offensive Tuesday morning, Times of India reported.

A group of suspected rebels stormed into the premises of the Entrepreneurship Development Institute (EDI) early on Monday and took positions inside one of the buildings, the daily reported.

An officer told AP yesterday that the suspected rebels exchanged intermittent gunfire with Indian soldiers, and occasional grenade explosions were also heard from the site. One soldier was reported injured in the initial fighting.

ToI reported that the suspected rebels, after entering the EDI complex, set mattresses inside a hostel room on fire to attract the attention of security forces.

Army and paramilitary soldiers reached the site and cordoned off a government compound, police earlier told AP.

The Times quoted an Indian army official on Tuesday saying, "Security forces have launched a fresh offensive this morning to flush-out the militants."

Officials quoted by ToI said that the Pampore encounter may stretch on for another day or two as the suspected rebels had not been confined in any part of the building as yet.

"Terrorists are firing and moving across the building, ruling out the option of burning it down," an official told the Times.

Security forces on Monday employed mortar shells, light machine guns and other small arms in their attempt to flush out the suspects but with no success.

As the standoff continued Monday, scores of people living on the western flank of the compound across a river hit the streets and chanted slogans against Indian rule in a show of solidarity with the militants. The residents ignored government orders to stay away from the site of the battle.

The attack comes as IHK is experiencing its largest protests against Indian rule in recent years, sparked by the killing in July of a popular rebel commander by Indian soldiers.

The protests, and a sweeping military crackdown, have paralysed life in IHK.