SRINAGAR: Three suspected militants and a policeman were killed Monday in a gunbattle in a busy market in Srinagar, police said, as panicked locals ran for cover.

The firing erupted when the suspected militants targeted a police patrol, killing a head constable, a police spokesman said.

“In the retaliatory firing by the police, three militants were killed,” the spokesman said, asking not to be named.

The violence sparked panic in Srinagar's Qamarwari area as people scurried for shelter, abandoning shops and homes amid fears of a prolonged fight, witness Nazir Ahmed told AFP.

“The area has been sealed off by police and paramilitary reinforcements,” he said, as senior police officers arrived at the scene.

For more than 20 years, insurgents in Kashmir have fought Indian police and soldiers in the highly militarised region. The violence has left at least 47,000 people dead, according to the official count.

India and Pakistan each hold part of Kashmir and claim the Himalayan region in full.