Three soldiers and two suspected Islamic rebels have been killed in the fighting as government forces battle militants in Pattan, a town 30 kilometers (19 miles) north of Srinagar, the summer capital of Jammu-Kashmir state, said Col. Majinder Singh, an Indian army spokesman.
The firefight started late Tuesday when suspected rebels hurled grenades and opened fire on an army patrol in Pattan, Singh said.
One soldier was killed Tuesday and two others on Wednesday.
The fierce battle continued to rage Thursday afternoon and troops recovered the body of a suspected rebel from a gutted house, a police officer said on condition of anonymity because he was not authorized to speak to media. Another rebel body had been found Wednesday.
The officer said six soldiers including an army officer have been wounded so far.
Short exchanges of fire are common in the beleaguered Himalayan region, but drawn-out firefights have become rare in recent months. The last, in early October, killed two army officers and nine suspected guerrillas.
Meanwhile, two troopers of the Central Reserve Police Force, or CRPF, were wounded when suspected rebels opened fire on their camp at Sopore, a town 20 kilometers (12 miles) from Pattan, said M.S. Gupta, a CRPF Inspector General.
Gupta also said that at least two suspected militants ran inside a nearby hotel.
"We've surrounded the hotel building where we believe the two militants are holed up. All the civilians have been evacuated," he said.
There has been no independent confirmation of either clash by any one of the dozen or so guerrilla groups operating in the area.
The rebels have been fighting since 1989 to win Kashmir's independence or see India's two-thirds of the predominantly Muslim Himalayan region merged with neighboring Pakistan's territory. More than 68,000 people, most of them civilians, have died since the start of the rebellion.
India and Pakistan, which both rule parts of Kashmir and claim it in its entirety, have fought three wars, two of them over control of the region, since they won independence from Britain in 1947.
The Chinese military believe that Beijing and Moscow must resist pressure from Washington together