Five suspected rebels were shot dead by government forces on Thursday in Indian-held Kashmir, officials said, as the disputed territory reels from the deadliest upsurge in armed conflict this decade.

More than 200 militants have been killed in violent clashes in Kashmir so far this year, officials say, amid a military campaign to rout armed groups resisting Indian rule in the divided Himalayan region.

In the latest skirmish, four gunmen were killed in central Budgam district in a firefight with Indian forces, said army spokesman Colonel Rajesh Kalia.

A fifth suspected militant was killed in Sopore, an area northwest of the main city of Srinagar, he added.

So far this year 205 rebels have been killed, according to police officials and watchdogs - the highest number since 2010, when a bloody uprising over the death of three civilians saw hundreds killed in protests and armed clashes with Indian forces.

Militant ranks have swelled since security forces shot dead a hugely popular rebel commander, Burhan Wani, in July 2016 and the frequency of deadly encounters with government troops has escalated.

Wani's death provoked an outpouring of anger directed at government forces that left nearly 100 dead and thousands injured.

"The number of militant killings is higher this year because more youth joined their ranks after last year's summer protests," a top police officer told AFP on condition of anonymity.

Civilians still often break curfew to rally whenever militants are killed or holed up in firefights, hurling stones and chanting anti-India slogans.

An Indian solider was wounded in the Sopore firefight on Thursday and three civilians were injured by pellets fired by government forces to disperse protesters in Budgam, a police officer said on condition of anonymity.

Indian officials believe around 200 armed militants are still active across the portion of the territory they control.

Kashmir has been divided between India and Pakistan since the end of British colonial rule in 1947. Both claim the former kingdom in full and have fought two of their three wars over its control.

Rebel groups have been fighting since 1989 roughly half a million Indian soldiers deployed in the territory, demanding independence or a merger of the entire disputed region with Pakistan.

The fighting has left tens of thousands, mostly civilians, dead.