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Gunbattle, strike in Kashmir as Indian PM begins visit

SRINAGAR, India, Wednesday (Reuters)

Indian soldiers killed two militants after a fierce gunbattle in Kashmir's main city on Wednesday, as Indian Prime Minister Manmohan Singh began a visit to promote peace in the disputed region.

Shops were shut in summer capital Srinagar and streets deserted in response to a general strike called by a hardline Kashmiri separatist group which is demanding Singh apologise for what it says were atrocities by Indian troops against Kashmiris.

Singh kicked off the two-day trip with a visit to Kashmir's holiest shrine, Hazratbal, which houses what many in the Muslim-majority territory believe is a hair from the beard of Prophet Mohammad.

Earlier about 1,000 Indian soldiers withdrew from a southern Kashmiri town as part of a highly touted move to scale back some forces in the Himalayan region. New Delhi hopes the withdrawal will send a message of reconciliation to Kashmiris and to old foe Pakistan, which controls a third of Kashmir. India controls nearly half.

But a pro-Pakistan Kashmiri guerrilla leader said the withdrawal was mere eyewash, staged to divert attention from Indian army abuses.

"The mujahideen (holy warriors) and Kashmiris are not fighting just for troop reduction. We took up guns for a complete withdrawal," said Syed Salahuddin, commander of the Hizb-ul-Mujahideen guerrilla group.

Singh arrived at heavily guarded Srinagar airport even as soldiers were engaged in a gunbattle with rebels near a cricket stadium, where Singh was scheduled to address a public meeting later in the day.

A police officer said the shooting began as soldiers surrounded a run-down building after a tip-off that two militants had entered late on Tuesday. The building, a former hotel, overlooks the stadium.

The militants later climbed a nearby hill from where they fired intermittently. Soldiers surrounded the hill and shot the two men dead. The little-known Al-Mansooriyan militant group called newspaper offices in Srinagar, saying the two militants belonged to them. A civilian and a soldier were wounded in the gunbattle.

Hundreds of soldiers were on the streets of Srinagar, and snipers were on rooftops ahead of Singh's arrival.

The first batch of soldiers, looking happy and waving their hands, moved out of Anantnag town in a convoy, a witness said.

The region has been the cause of two of the three wars between the nuclear-armed India and Pakistan since independence from British colonial rule in 1947.

The neighbours began a peace process last year to try to resolve the dispute and to end a 15-year-old rebellion against Indian rule of Jammu and Kashmir state in which tens of thousands of people have died.

Meanwhile Indian Prime Minister Manmohan Singh Wednesday held out hope for further troop reduction in Kashmir if violence levels dropped.

"We are working with Pakistan to put an end to senseless violence," Singh told medical students soon after arriving in Srinagar, the summer capital of Indian Kashmir."

I have already given instructions to reduce troops in Kahmir and if violence goes down and if infiltration (of militants) ends it will become easier for me to reduce forces further," he said.

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