Two soldiers were killed and three others wounded in India-held Kashmir on Saturday as soldiers traded fire with suspected separatists who were holed up inside an army camp, a minister said.

Abdul Rehman Veeri told lawmakers in the area's legislative assembly that the gun battle, which began early morning, continued into the afternoon on Saturday.

The gunmen were holed up in the residential area of the camp where soldiers and their families are housed, police chief of Jammu area S.D. Jamwal told reporters outside the camp. Jamwal also said that a soldier's daughter was wounded in the attack. It was unclear how many suspected separatists were involved.

The camp is located on the outskirts of the city of Jammu. The area was cordoned off and schools closed.The Himalayan region of Kashmir is divided between India and Pakistan. Both claim the region in its entirety.

Several militant groups have been fighting for Kashmir's independence from India or its merger with Pakistan since 1989. Around 70,000 people, mostly civilians, have been killed in the uprising and the ensuing Indian military crackdown.

Anti-India sentiment runs deep among Kashmir's mostly Muslim population, with most people supporting the rebel cause. India accuses Pakistan of arming and training the militants, a charge Islamabad denies.