Security forces in Indian-administered Kashmir on Saturday killed a top rebel commander in a gun battle, sparking massive protests and clashes in the region.

Sabzar Ahmad Bhat, a senior leader of the Hizbul Mujahideen group, was killed overnight by government troops in Tral area, some 40km south of Kashmir's capital, Srinagar, police said.

Hizbul Mujahideen is the largest indigenous rebel group fighting against Indian-rule in the Himalayan territory since a armed rebellion broke-out in 1989.

In July 2016, the killing of Hizbul Mujahideen leader Burwan Wani sparked months of anti-India protests in which scores of people died.

One of Bhat's fighters was also killed in the gun battle, which erupted late on Friday after government forces cordoned off a village following an intelligence tip-off.

"Yes, both of them were gunned down," police chief Shesh Pal Vaid told the AFP news agency.

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Police said the fighting was ongoing with at least one fighter holed up in a house.

As the violence raged, hundreds of angry residents chanting anti-India slogans marched in an attempt to help the trapped rebel escape.

'We want freedom'

Clashes between rock-throwing protesters and government forces erupted in different places in the area, with police and paramilitary soldiers firing shotgun pellets and tear gas to stop the protests.

As the news of Bhat's killing spread in the region, thousands of people, including students, took to the streets shouting slogans such as "Go India, go back" and "We want freedom."

Many civilians were reported wounded in the clashes.

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In a separate incident, the Indian army on Saturday said they had killed six fighters who had infiltrated across the border from Pakistan in the Himalayan region.

Kashmir has been divided between India and Pakistan since the end of British rule in 1947. Both claim the disputed territory in its entirety.

Most people in India's portion favour independence or a merger with Pakistan.

Several armed rebel groups are fighting against Indian rule in Kashmir, with tens of thousands of people, most of them civilians, killed in the nearly three decades-old conflict.