By Agence France-Presse
All six rebels belonged to Ansar Ghazwat-ul-Hind, a small Kashmiri rebel group whose now only surviving member is its chief Zakir Musa, top police officer Munir Ahmad Khan told AFP.
Soldiers zeroed in on a militant hideout in an orchard during searches in southern Tral area and fired warning shots, triggering a brief firefight that left the six militants dead, inspector general of police Swayam Prakash Pani said.
Eye witnesses said hundreds of locals came out on the streets and clashed with police, who had to fire tear gas to disperse them, after encounter with the rebels.
Authorities also suspended mobile internet and train services in the Kashmir valley to prevent a large gathering of protestors.
This has been the deadliest year in a decade in Kashmir, with more than 550 people including 150 civilians killed, according to a monitoring group.
Saturday's clash came a day after two Indian soldiers were killed by alleged sniper fire from the Pakistani side of the Line of Control, the de facto border that divides the disputed region.
Both countries have claimed the former Himalayan kingdom in full since they gained freedom from British rule in 1947.
Decades of fighting between rebel groups and the half million Indian soldiers deployed in the New Delhi-controlled part of the territory has left tens of thousands dead, mostly civilians.
New Delhi accuses Pakistan of arming and training rebels fighting Indian forces, an allegation Islamabad denies, saying it only provides diplomatic and political support.