Government ready to negotiate as blockade by Hindus stirs Muslim separatist sentiments.
However, on the same day, thousands of Kashmiri Muslims took to the streets to protest.
Police said they used tear gas and batons to control the demonstrators and prevent them from marching to a local UN office.
Prabhakar Tripathi, a spokesman for Central Reserve Police Force, said at least five paramilitary soldiers were injured.
He gave no figures for casualties among the protesters.
Shops, businesses, government offices and schools remained closed in protest for a fourth day on Friday in Srinagar.
SM Sahai, the police chief of Jammu and Kashmir, declined to comment on the three separatist leaders’ detention, but said, “they may be pretending to lead peaceful protests, but they actually foment trouble”.
Anger between Hindus and Muslims in the Himalayan region has been on the rise since June when the Jammu and Kashmir government decided to award 99 acres of land to the Shri Amarnath Shrine Board, a trust that maintains the Amarnath shrine, a revered Hindu site.
The shrine contains a large icicle revered by Hindus.
The state government was forced to revoke the land transfer last month after a week of often violent protests by Muslims, who said building Hindu settlements in the area would alter the demographics in the state.
However, the reversal of the government decision triggered massive streets protests by Hindus in Jammu as well as Samba, a town on its outskirts.
Muslims claim they are being targeted in Jammu, the only Hindu-majority city in the state, with Hindu mobs attacking their shops and homes and chanting slogans demanding Muslim Kashmiris leave the area. They claim security forces are not doing enough to protect them.
The violence has escalated sharply over the last two weeks and so far six people have been killed in the new clashes.
The casualties include a Muslim man killed when a tear gas shell hit him while he was protesting in Srinagar.