The attack on Wednesday was near the mountain-ringed Dal Lake in Srinagar, Kashmir's summer capital and a bustling tourist centre.
Witnesses said the wounded were taken to hospitals in ambulances and police vehicles. Women and children were among the wounded, police said.
It was the second attack on tourists in a week. Last week, four Indian holidaymakers, including a child and a woman, were killed and six wounded when a grenade was thrown at their bus in Srinagar.
Also on Wednesday, two people were killed when Indian soldiers opened fire during a protest at a Kashmiri lake where 20 children and two adults drowned, witnesses and the army said.
According to one witness, Ghulam Nabi, soldiers opened fire when villagers attacked an army patrol with sticks near Watlab army camp on the shores of Wular Lake, about 70km north of Srinagar.
The incident, in which two people were also injured, came after divers had pulled another five bodies from the lake where an Indian navy boat giving school children a ride had capsized on Tuesday.
Mourners attend the funerals of
the drowned children
The bodies of 15 children and two school staff were recovered on Tuesday from Wular, one of Asia's biggest fresh water lakes.
Locals, angry that the navy had taken the children - aged between seven and 14 - in a high-speed boat, alleged two sailors in charge of the vessel had jumped out before it sank.
They also say the boat was overcrowded and those on board were not provided with life jackets.
The army denied that it opened fire at the demonstrators, saying soldiers had responded after coming under attack.
Vijay Batra, an army spokesman, said: "The army retaliated when a militant from the crowd opened pistol fire injuring an army soldier.
"We managed to kill the militant while a civilian standing close to him also died."
Thousands of residents later staged a noisy demonstration against the army, prompting police to use teargas and batons that left about a dozen people injured, police said.