No group has claimed responsibility for the attack which comes three days after armed men threw grenades outside the Chief Minister's house in Srinigar. The two men were later killed by Indian soldiers, following a long gun battle.
In a separate incident, soldiers patrolling the south of Srinigar came under attack from armed men throwing grenades in Anantnag town. The grenade missed its target and exploded on the road, killing one person and injuring six others.
Cycle of violence
There has been a sharp increase in violence in the disputed territory of Kashmir over the past few weeks, as the death toll continues to rise.
|Indian soldiers training in Kashmir|
India has accused Pakistan of encouraging a ''revolt'' in Kashmir, a claim that has been denied by Islamabad. Pakistan has called on India to hold fresh talks to resolve the dispute.
An estimated 12 million people live in Kashmir, 70% of whom are Muslim. The rest includes Hindus, Sikhs and Buddhists.
India and Pakistan have fought two wars over Kashmir in 1947 and 1965. Last year, India deployed more than a million troops on the border to prepare for a possible war with nuclear neighbour Pakistan over the disputed territory.
However, since April 2003 India and Pakistan have restored full diplomatic relations and have resumed a cross-border bus service.