A civilian was killed and several wounded Thursday in India-held Kashmir when security forces opened fire on a crowd gathered for the funeral of three suspected militants slain overnight in clashes with soldiers, police said.

Thousands of villagers poured onto the streets for the funeral, chanting slogans against Indian rule and pelting stones at soldiers who responded with bullets and pellet fire, a police officer said.

S.P. Vaid, director general of police for the territory, confirmed a protester was killed in the exchange.

Another police officer, speaking on condition of anonymity, said at least a dozen others were injured by pellets fired by government forces to disperse the angry crowd.

On Wednesday night soldiers and counter-insurgency police had surrounded a residential area where they suspected armed militants were hiding out, triggering a fierce exchange of fire.

Scores of residents then emerged from their homes to pelt stones at the soldiers in a bid to help the suspected militants escape, a police officer said.

“Three terrorists were killed and three weapons recovered from the site,” army spokesman Colonel Rajesh Kalia said earlier Thursday.

Witnesses said the army blew up the house where the suspected militants were hiding in Kakapora, around 30 kilometres (19 miles) south of the main city of Srinagar.

One soldier was also injured in the gun battle, police said.

Separatists groups have since 1989 been fighting roughly 500,000 Indian soldiers deployed in the region, demanding independence or a merger with Pakistan.

The fighting has left tens of thousands dead, most of them civilians.

Dozens of local youths have joined the militant ranks since last year when the killing of a popular separatist commander Burhan Muzaffar Wani sparked wide scale anti-India protests that left more than 100 civilians dead and thousands wounded.

Public opposition to Indian rule remains deep and is now principally expressed through street protests marked by youths hurling stones at government forces.