Indian government forces killed three Kashmiri men, whom they claimed to be fighters, in a shootout in occupied Kashmir on Wednesday, triggering anti-India protests and clashes between troops and residents.

The Indian military said the fighters opened fire at soldiers and police as counter-insurgency troops surrounded a neighbourhood in the southern town of Pulwama on a tip that fighters were hiding there.

Troops retaliated and trapped the fighters in a house, a statement by the military said. Three fighters were killed in an ensuing eight-hour long operation and two rifles and a pistol were recovered from the site, the statement said.

Locals said troops set fire to one house and blasted another with explosives, a common 'anti-militancy' tactic employed by Indian troops in the Himalayan region.

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Authorities issued a curfew in Pulwama town and cut off internet on mobile phone services, a tactic aimed at making organising anti-India protests difficult and discouraging dissemination of protest videos.

Shortly after the shootout, anti-India protesters threw stones at government forces and chanted slogans seeking end of Indian rule over the occupied region. Government forces fired tear gas at the protesters. No one was reported injured during the clashes.

Locals said government troops detained several people and forced them to sit in front of them as shields during the clashes.

Wednesday's fighting comes amid a surge in violence in the region.

Last week, authorities in the region dismissed 11 Kashmiris from their government jobs for alleged links with fighter groups. They included two sons of a top Kashmiri commander and two police officials.