A Kashmiri fighter being held in police custody was killed in a gunfight between Indian government forces and another fighter in occupied Kashmir's main city, Indian police said on Tuesday.

The commander, Nadeem Abrar, was arrested on Monday in Srinagar and was under interrogation, police said in a statement. Inspector General Vijay Kumar called his arrest a "big success" against Kashmiri fighters.

Police said Abrar, during a sustained interrogation, identified a house where he had concealed his automatic rifle. A police raiding party took Abrar to the house, where they were hit by gunfire from a fighter, who was originally from Pakistan and was hiding inside, the statement alleged.

It said Abrar and three Indian soldiers were hit by the shots, which sparked a gun battle that ended early on Tuesday.

In the ensuing gunfire, the fighter who allegedly fired from inside the house was shot dead and Abrar also got killed, the statement said. Police claimed the slain man was Abrar's associate.

Police said they recovered two rifles along with some ammunition from the site.

In the past, many fighters have been killed while being taken by police to recover weapons, in what rights groups and residents have called extrajudicial killings.

Earlier this month, a heated gun battle broke out between fighters and police in occupied Kashmir, resulting in the deaths of at least two civilians and two police officials.

Anti-India protests had later erupted during the civilians' funerals in Sopore, the northwestern town in Baramulla district where the fighting took place, after local residents alleged police had shot and killed one of the civilians after the fighters fled the scene.