Two Indian Air Force (IAF) commandos and two suspected rebels were killed during a gunbattle Wednesday in Indian Held Kashmir, the army said, during an upsurge in violence in the disputed region.

The fighting started when soldiers searching for militants cordoned off a neighbourhood in the northern town of Hajin.

"It was a difficult operation. Two militants were killed in the encounter. unfortunately two air force commandos also died," a police officer told AFP.

The deaths came two days after a leader of the banned militant group Jaish-e-Mohammad was killed in a shoot-out with government forces in Kashmir.

Rebel groups have for years been fighting Indian soldiers deployed in the region, demanding that Kashmir be given independence or merged with Pakistan.

The fighting has left tens of thousands dead, most of them civilians and earlier this year India launched "Operation Allout" to hunt down the rebels.

Police say at least 160 militants and 59 soldiers or police have been killed so far this year.