Sheikh Rashid Ahmed had applied to travel to the main city in Indian Kashmir, Srinagar, on the next cross-border bus, next week.
The bus service began in April to reunite families divided by half a century of war and rebellion, as part of a peace process after India and Pakistan came close to war in 2002.
A former Pakistani army general had alleged last week that Ahmed ran a training camp for Kashmiri separatists in the 1980s.
A moderate separatist leader from Indian-administered Kashmir was also quoted by the media as saying so, but Ahmed issued a strong denial later.
Meanwhile, a powerful car-bomb killed three Indian soldiers and wounded 20 others on Friday as a bus carrying troops passed a popular tourist attraction in Indian-administered Kashmir, police said.
The explosion ripped the bus apart and shook the famed Mughal gardens on the shores of Dal lake in the summer capital Srinagar around 4pm (1030 GMT), a police spokesman said.
The spokesman said explosives were placed in a car and detonated as a military convoy passed by. The bus carrying the soldiers bore the full brunt of the car-bomb.
The region's dominant rebel group Hizbul Mujahedin, which wants Kashmir merged into Pakistan, claimed responsibility for the blast in a telephone call to local news agency Kashmir News Service.
Seven of the injured soldiers are in serious condition, the spokesman said.
Violence in Kashmir has killed
thousands since 1989
An AFP photographer at the scene said bits of flesh were lying inside the damaged bus and on the road.
Residents said the bus smashed into electricity pylons and telephone polls after being struck by the car-bomb. The force of the blast sent parts of the bus flying up to 100 metres away.
The area was swiftly sealed off by troops and police.
The gardens are visited by hundreds of Indian tourists and locals daily.
"The blast shook the entire locality, bringing people out of their houses," resident Nusrat Farooq said.
Tens of thousands of people have died since an anti-Indian insurgency broke out in the region in 1989.