Police said the two militants belonged to the Pakistan-based banned Lashkar-e-Taiba (LeT) group, which is fighting Indian rule in Kashmir, and was blamed by India for the 2008 Mumbai attacks.
Government forces killed two heavily armed Islamist separatists on the outskirts of Srinagar on Friday, a day after soldiers shot dead two militants to end a daring siege of a city hotel.
Friday's shootout began after an army patrol was fired at from a house in Pampore town, about 12 km south of Srinagar.
Police said the two militants belonged to the Pakistan-based banned Lashkar-e-Taiba (LeT) group, which is fighting Indian rule in Kashmir, and was blamed by India for the 2008 Mumbai attacks.
Intelligence agencies have warned of a spike in attacks in Kashmir such as this week's siege at a Srinagar hotel that paralysed the city for almost 22 hours.
The flare-up in violence is the worst in two years in Srinagar, hurting government claims of a gradual return to peace after successful local elections last year.
Such attacks, experts say, could raise the political temperature between India and Pakistan, and make more difficult any effort at normalising relations strained by the 2008 Mumbai raid.
The government has so far appeared keen to avoid raising tensions with Pakistan, but another big attack could test New Delhi's restraint.
"The fear is, any bigger attack outside Kashmir will hamper chances of resumption of any dialogue with Pakistan," retired Major General Ashok Mehta, said in New Delhi.
India blamed Pakistan for the Mumbai attacks in November 2008 in which 166 people were killed by 10 armed men in a three-day rampage. New Delhi "paused" five-year-old peace talks with Pakistan, saying Islamabad must crack down on a militant network on its soil that regularly carries out attacks on India.
Intelligence officials say violence may go up in Kashmir and other parts of India because hundreds of Pakistan-based militants could have sneaked into India in the past few months.
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