A Kashmiri armed resistance group on Thursday criticised the US decision to place it on a terrorism list and charged Washington to recognise "Indian state terrorism" in the troubled region.

"The decision by the United States is regrettable and shocking," Sayid Salahuddin, commander of Hizb ul-Mujahidin said.

Hizb ul-Mujahidin are now terrorists as far
as the US is concerned

"The least we can say is that they (US) have made it to please India while ignoring the bitter realities on the ground in Kashmir," the Pakistan-based leader said.

Pakistan said it would consider its response carefully on how to deal with the armed group.

"It is not a question of endorsing what the United States has done. We will look at our own circumstances," Interior Minister makhdoom Faisal Saleh Hayat said.

Analysts however believe Pakistan will face a lot of pressure should it not expel the group soon. "It puts Pakistan in a difficult position", former general Talat Masood said, adding "Pakistan will wait. It will have to be convinced they are engaged in much more than what appears on the surface."

The State Department has released a list of 38 "terrorist" groups which are not on its primary list of Foreign Terrorist Organisations (FTOs), but which the US believes need to be monitored.

The list identified Hizb ul-Mujahidin and two other Kashmiri armed groups, Jamiat ul Mujahedin and Al Badar Mujahidiin.

The announcement was made on the same day that five people were injured when police used force to disperse several hundred people protesting against the killing of a Muslim student in Kashmir, allegedly by Indian security forces, witnesses said.

Soldiers of the Indian army's counter-insurgency wing, the Rashtriya Rifles shot, and wounded student Javed Ahmed near his house in the Soitang area of Srinagar.

Residents scoffed at the Indian Army's initial claim that Jayed Ahmed was a terrorist and their later claim that he was caught in crossfire, saying he was an innocent student killed after being dragged out of his house.

Five of those that protested Ahmed’s killing were injured themselves, one demonstrator was hit on the head by a tear gas cannister and had to receive 13 stitches.

With events such as these becoming an almost daily occurrence, Sayid Salahuddin does not believe that being blacklisted will stop his groups activities in Kashmir.

"We will accelerate our attacks against the (Indian) occupation forces and their installations for subjugating Kashmiris."

Shabir Shah, a man dubbed as Kashmir's Nelson Mandela after spending 23 years in Indian jails since the age of 14, believes Kashmir is bracing for an increase in violence as winter snow blocking mountain passes melts, freeing up the movement of activists.

"It's only because of Kashmir that these two countries have fought three wars. South Asia will be peaceful only when there is a meaningful, result-oriented dialogue on Kashmir."

Shah warns that "vested interests" on both sides would seek to derail any progress towards a lasting solution to the bitter dispute at the heart of more than half a century of tension and conflict between South Asia's nuclear-armed powers.

"Such kinds of interests are in India and Pakistan and Kashmir who want the status quo to continue," he said, adding that India and Pakistan could stop these groups if they were sincere. 

"Post-September 11 and Iraq, there's pressure on both countries to get together and solve their differences," said Shah, who leads the Democratic Freedom Party.

"We are peaceful people, we want peace with dignity and honour," he said.