Indian security forces martyred three freedom fighters, while suspected fighters shot dead a migrant worker on one of the bloodiest days in Occupied Kashmir since New Delhi revoked the disputed region's autonomy and special status more than two months ago.

The killings on Wednesday were the first since mobile telephone services were restored as part of gradual relaxation of security measures taken to curb violent unrest in Occupied Jammu and Kashmir state.

A security lockdown is still largely in place, and broadband and mobile internet connections remain unavailable to most Kashmiris. The fighters killed on Wednesday died during a gun battle after soldiers, acting on a tip-off, raided a village in Occupied south Kashmir, two police sources told Reuters.

"Three terrorists were killed and the bodies were retrieved from the site of the encounter," Kashmir police said in a statement. "Incriminating material, including arms and ammunition, was recovered."

Neither the soldiers or police, who were also present, suffered casualties, according to the police sources, who spoke on condition of anonymity as they were not authorised to talk to the media.

Security forces imposed travel restrictions near the site of the gun battle to prevent unrest, the sources said. Many Kashmiris hostile to India's rule often gather to throw stones at security forces after fighters are martyred.

In a separate incident in occupied south Kashmir's Pulwama district, suspected fighters shot dead a migrant worker from Chhattisgarh state, in central India, in an execution-style killing, police said.

"Area has been cordoned and searches are going on," Kashmir police said in a tweet.

Sagar, who worked as a labourer at brick kiln, was walking along a railway track in the Kakapora area when he was stopped by two people. "He was shot in the head," a police official said, declining to be named.