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Srinagar (India) (AFP)

Indian forces on Tuesday killed a top commander of Pakistan-based militant group Lashkar-e-Taiba during a raid in Kashmir and hailed it as a "major achievement".

Abu Dujana, considered one of the key fighters battling security forces in the Indian-administered part of Kashmir, was trapped in a house in a pre-dawn operation, and killed along with an aide, police said.

A civilian was also killed and at least 20 people were injured when government forces fired teargas and bullets at hundreds of villagers who tried to march on the site of the firefight, a police source said.

Police special counterinsurgency forces surrounded the village of Harkipora, south of the Kashmir capital of Srinagar, after a tip off that the militant and aide were inside a house. A fierce gunfight followed, police sources said.

"LeT chief commander Abu Dujana of Pakistan along with his accomplice killed in Harkipora Pulwama, huge achievement for police and SF (security forces)," a police statement said.

Witnesses said one of two houses from which the militants fired was set ablaze by soldiers and another was blown up using heavy explosives.

A police officer, speaking on condition of anonymity, said Dujana's aide was identified as a teenage local rebel and their bodies were charred "nearly beyond recognition".

The civilian casualties came as hundreds of villagers tried to march towards the site of the firefight throwing stones and shouting slogans like "Go India, go back" and "We want freedom", the officer said.

Stone-throwing civilians, sometimes entire communities, have increasingly gone out onto the streets to support rebels trapped by military cordons in a bid to help them escape.

Witnesses said protests and clashes spread to other areas in southern parts of the Kashmir valley as well as Lal Chowk, the main commercial center of Srinagar.

Government forces have been hunting for years for Dujana, who had a reputation for being "smart and a master of disguise". He was believed to have escaped at least five previous military cordons.

Kashmir has been divided between India and Pakistan since the end of British colonial rule in 1947. Both claim the Himalayan territory in full.

Rebels groups, including LeT, have for decades fought roughly 500,000 Indian soldiers deployed in the Indian-controlled section of the territory, demanding independence or a merger with Pakistan.

Tens of thousands, mostly civilians, have died in the fighting.

© 2017 AFP