Government forces in India-held Kashmir fired shotgun pellets and tear gas at hundreds of mourners on Saturday during a funeral march for a man, Qaiser Amin Bhat, killed after he was run over by a paramilitary vehicle during a protest.

Bhat was critically injured on Friday and died overnight in a hospital after a paramilitary armoured vehicle crushed at least two men during an anti-India protest.

Kashmiri men carry body of Qaiser Amin Bhat, during his funeral in Srinagar. — AP

The angry mourners were marching with the man's body to a graveyard in Srinagar on Saturday when police and soldiers used force to stop them. Police said the marchers were defying a government order that bans assembly of more than four people in the city.

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Residents said youths from the funeral regrouped in the winding streets of the city's downtown and threw stones at troops while chanting slogans in favour of separatists and demanding an end to Indian rule over the disputed region. Fierce clashes broke out in several places in the city.

Police later took the custody of the body and said they would allow only a handful of relatives to take the body for burial in the city's main martyr's graveyard where hundreds of separatists and civilians killed are buried.

When hundreds of residents showed up, witnesses said police again fired tear gas into the mourners. That set off pitched battles between residents and government forces. At least a dozen people were injured in the day's clashes.

Armed police and paramilitary soldiers laid razor wire and steel barricades at roads and enforced a curfew in old parts of Srinagar to restrict participation in the funeral.

Authorities cut mobile internet services in Srinagar, and reduced connection speeds in other parts of the Kashmir Valley, a common government practice to prevent anti-India demonstrations from being organised.

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Shops, businesses and schools remained closed in the region on Saturday as separatists had already called for a strike to protest Indian rule.

Friday's incident was the second of its kind in recent weeks. Last month, a young man was killed when a police armoured vehicle ran over him during clashes with government forces in Srinagar.

Residents said the armoured vehicle in Friday's incident drove wildly into a crowd of anti-India protesters, slamming into a half-dozen people and crushing at least two men beneath its wheels, injuring them critically.

An AP photographer captured the horror in a series of photographs of the other injured man, who doctors say is still in critical condition.

Indian officials blamed the protesters and said the crowd was trying to drag the soldiers from their vehicle.

Police, however, said the incident was a mistake by the nervous driver and on Saturday registered a case against him for “rash and negligent driving".

Police also said they were registering cases of attempted murder against an unspecified number of protesters who attacked the vehicle.

Anti-India sentiment runs deep in Kashmir, a disputed Himalayan territory divided between nuclear-armed rivals India and Pakistan but claimed by both in its entirety. In recent years, the India-held portion has seen renewed militant attacks and repeated public protests against Indian rule.