The Indian army acting on a tip-off surrounded a suspected rebel hideout in Wahbugh village of Pulwama district, 45 km south of Kashmir's summer capital Srinagar, defence sources said.

The militants, who were in a residential area, opened fire on the soldiers as the army closed in. Six rebels were killed and three soldiers sustained injuries, a defence source said.

"The fighting lasted for several hours and a few militants are believed to have escaped," an army officer told AFP.

A spokesman for the Harkat-ul-Mujahedin rebel group said its district commander and another district commander of the hardline Jaish-e-Mohammad were among the militants killed.

"The army raided the hideout when an important meeting was taking place," the spokesman told a local news agency.

In an encounter in southern Kashmir, three Islamic rebels and two Indian soldiers were killed in the Bhimber Gali area of Rajouri, 190 km west of Kashmir's winter capital Jammu, army spokesman Colonel Bhanwar Rathore said.

He said the fighting erupted during a search operation by the Indian army in the area, which lies close to Pakistan-administered Kashmir.

A 14-year Islamic insurgency against Indian rule in Kashmir has left more than 38,000 people dead by official count. Separatists put the toll at between 80,000 and 100,000.

The scenic region has seen a surge in violence since troops gunned down top Jaish-e-Mohammad commander Gazi Baba in Srinagar on August 30. Since then at least 244 people have died in Kashmir, most of them rebels and civilians.

Troops from India's Border Security Force (BSF) backed by police Saturday unearthed a Jaish-e-Mohammad hideout hidden under a kitchen in Srinagar's Qamarwari area, BSF spokesman Tirtha Acharya told AFP.