Four suspected rebels were killed in an alleged fighting with the Indian army in Kashmir, as businesses and schools remained shut in the disputed region on Monday in response to a separatists' call to protest the killing of eight civilians by government forces during a weekend by-election, officials said.

Indian army spokesman Colonel Rajesh Kalia said a gunbattle erupted Sunday night after the four suspected militants allegedly crossed from the Pakistani side of the Himalayan territory into the Indian-held portion of Kashmir in Keran sector.

There was no independent confirmation of the incident.

Meanwhile, a strike called by separatists who challenge India's occupation over Kashmir paralysed life in the Kashmir Valley on Monday.

Widespread protests and clashes on Sunday marred a by-election for a vacant seat in India's Parliament as thousands of people attacked polling stations.

The Indian forces fired on rock-throwing protesters, killing eight people and wounding at least 100. Officials said about 100 police and paramilitary soldiers were also injured in the clashes.

Only about 7 per cent of the area's nearly 1.3 million voters cast ballots on Sunday, the lowest turnout in elections held by India in the region over the past five decades, said chief electoral officer Shantmanu, who uses only one name.

A second by-election is scheduled for Wednesday in Anantnag, Shopian, Pulwama and Kulgam districts.

Anti-India separatists consider elections in Kashmir to be illegitimate, saying that India militarily occupies the region. India has long viewed polling as an endorsement of its control over a portion of Kashmir.