Shivraj Patil, installed after the Congress-led alliance's victory in April-May national elections, insisted security had improved in the region where tens of thousands have died in a 15-year rebellion against Indian rule.

"Here the (security) situation seems to be improving," said Patil, who was helicoptered to the governor's house while troops flooded the streets of the state's summer capital.

"We will have to work towards creating harmony and improve economic conditions," he added.

The home minister, accompanied by Parliamentary Affairs Minister Ghulam Nabi Azad -- himself a Kashmiri -- said there was nothing to stop separatists travelling to Pakistan, and also that India was willing to talk to all separatists opposed to Indian rule.

"There are no restrictions of any kind on anyone wanting to travel (to Pakistan)," Patil said.

"If they (separatists) inquire ... through proper methods, we will look into it. There should not be any problem."

The head of the moderate faction of region's main separatist alliance, Mirwaiz Omar Farooq has ruled out talks until separatists are allowed to visit Pakistan.

Farooq's faction held two rounds of talks with former Indian deputy prime minister Lal Krishna Advani earlier this year.

"We have decided not to hold any further talks with the centre," Farooq told reporters late Friday.

"We should be allowed to visit Pakistan first to hold talks with the Pakistani leadership," he said.

Only Farooq has a passport; other separatists have either been denied travel documents or have had them impounded by the Indian authorities.

Ahead of Patil's arrival, militants attacked a paramilitary camp in the northern town of Sopore, 50km north of Srinagar, hurling grenades and firing at random, a Border Security Force (BSF) official said.

Border guards returned fire, killing one of the militants. Five border security guards were also wounded, one of whom died later, the official said.

Indian troops, meanwhile, shot dead five militants in the Mendhar sector of southern Poonch district after they sneaked into Indian Kashmir from the Pakistani zone of the divided state, a defence spokesman said.

Three more rebels were shot dead in northern Uri sector after they infiltrated into Indian Kashmir, police said, adding that two other militants died in a fierce gunfight in neighbouring Baramulla district early Saturday.

In Srinagar, two soldiers were killed and a civilian injured in a grenade attack by rebels as the minister was in a meeting with state legislators just eight kilometers (five miles) away, police said.

In northern Kupwara suspected rebels shot dead a police informer.

Security for Patil's visit was tightened further after the Sopore attack, police said.

On Sunday the minister will visit Jammu, the winter capital.

Thousands of people have died in Kashmir since the eruption of insurgency against Indian rule in 1989.