Tension in Muslim-majority Kashmir has been high since a February 14 suicide bomb attack by the Pakistan-based Jaish-e-Mohammed (JeM) militant group killed at least 40 Indian paramilitary police.

Prime Minister Narendra Modi gave troops a "free hand" to respond to the attack, and near-daily searches in villages in Kashmir since then have often triggered violent confrontations, with civilians caught in crossfire.

Modi's tough response to the attack, which included an air strike against what India said was a militant camp in Pakistan, is believed to have given his party a boost in a general election that ends on May 19.

Three JeM militants, including a Pakistani commander, and an Indian soldier were killed in the gun battle in Dalipora, a village in south Kashmir, police said.

Villagers said a civilian, who they identified as Rayees Ahmad Dar, 32, was also killed after Indian soldiers had sent him to search a house where militants were believed to be hiding. Villagers in the area have complained before about the army using civilians as human shields in searches.

A police spokesman said Dar had been killed in indiscriminate firing by the militants, and denied he had been sent on a search.

Also on Thursday, police said seven people had been arrested and a curfew imposed on a town in the region after a Muslim man transporting horses was shot dead, allegedly by a Hindu group wanting to protect the rights of cows, an animal considered sacred in their religion.

India and Pakistan have fought three wars since their independence, two of them over the Himalayan region, and came close to another in February.

Australian Associated Press