SRINAGAR: Indian security forces on Friday shot at and fired tear gas at anti-India protesters who broke from a funeral procession of a suspected insurgent killed in India-held Kashmir.

Police said at least two people suffered serious bullet wounds in the violence as thousands of protesters waved Pakistani flags and chanted "Down with India" and "We want freedom."

The protesters hurled stones at Indian government forces in at least three places in the village of Kakpora, 35 kilometres south of Srinagar.

Indian forces had killed the suspected insurgent on Thursday, senior police officer Nitesh Kumar said.

Rebel groups have been fighting against Indian forces in Kashmir since 1989, and more than 68,000 people have been killed in the fighting and the subsequent military crackdown in the volatile valley.

Read more: Two Indian soldiers, one suspected rebel killed in ambush in India-held Kashmir

The latest clashes erupted on Thursday as Indian police and paramilitary soldiers cordoned off the village following an intelligence tip-off that some rebels had taken refuge there.

A gun battle between the two sides killed Talib Shah, who is alleged by the Indians to be a local commander of the militant group Lashkar-e-Taiba, said Kumar. Two other suspected insurgents managed to flee.

Anti-India protests resumed on Friday after government handed over Shah's body to his relatives.

Meanwhile, a Pakistani foreign ministry official rejected as "totally baseless" Indian media's reports that an insurgent arrested in Indian-held Kashmir on Wednesday was a Pakistani national. He spoke on condition of anonymity as he was not authorised to talk to reporters.

Pakistan's foreign ministry spokesman Qazi Khalilullah added on Thursday, "We expect Indian authorities to share necessary information with us."

India's Home Minister Rajnath Singh said in Parliament that the arrested man had told Indian investigators that he was from Faisalabad, in Pakistan.

Read more: Kashmiri leader waves Pakistani flag at rally in Srinagar