Srinagar, Kashmir - At least seven suspected Muslim militants and an Indian army officer were killed in a gun-battle in India-administered Kashmir, officials said Wednesday.

The clash erupted near the Line of Control, a de facto border that divides Indian and Pakistani-administered parts on Tuesday, and was continuing, a statement issued by the Indian Defence Ministry said.

"The fighting which has been on since two days in a forested region in Kupwara has left an army officer and seven militants dead," a spokesman said.

Kupwara is located some 100 kilometres north of the state's main city of Srinagar.

While the officer and three rebels were killed on Tuesday, four militants were killed in the encounter on Wednesday, he added.

The NDTV network reported that security forces were targeting a group of militants - who had crossed over from the Pakistani side - in the biggest counterinsurgency operation in the state this year.

India alleges that thousands of armed insurgents infiltrate into India-administered Kashmir each year and carry out attacks against Indian security forces and Kashmiri civilians.

India accuses Pakistan of funding and arming Kashmiri secessionist militants. Pakistan denies the allegations, saying the Kashmiri militants are local freedom fighters.

Picturesque Kashmir valley is at the heart of a long conflict between nuclear-capable South Asian neighbours who have fought two wars over it since the partition of the Indian subcontinent in 1947.

An estimated 40,000 people, including civilians, militants and security personnel, have been killed in political violence in India-administered Kashmir since 1990. (dpa)