The Indian government is accused of using pump action shotguns to break up a public rally attended by thousands.
Two people were killed and 100 others were injured on Saturday in clashes between Indian security forces and protesters angered by the killing of Pakistan-based Hizbul Mujahideen commander Burhan Muzaffar Wani.
A medical officer in a local hospital in southern Shopian District said one young man was killed after his head was hit by a tear gas canister fired by police.
Another protester died of pellet injuries as Indian security forces fired pump action shotguns to break up a public rally against the Indian Government attended by thousands in Botengoo village in southern Kashmir valley, a police officer told Agence France Presse.
"We have reports of more than 100 injured in today's protests. Around 25 of them have bullet wounds," the police officer added.
The protests began on July 8 when Indian security forces killed Burhan Muzaffar Wani, a commander of Pakistan-based Hizbul Mujahideen.
Wani was a commander of the Pakistan-based separatist group. He enjoyed widespread support in disputed Kashmir.
Since the unrest in the region first broke out 78 people have been killed.
The Indian Government has been criticised for the level of casualties and the use of pellet guns during the protests.
The metal pellets fired from the pump-action shotguns rarely result in deaths, but can often blind victims if the fragments hit them in the eye.
Authorities lifted a curfew in most parts of the territory in late August. However, schools, shops and many banks remain closed while residents struggle with a communications blackout.
Indian-ruled Kashmir is predominantly populated by Muslims. There is a strong movement in the area aligned with Pakistan that seeks independence of the territory from India.
The two neighbours, which have fought three wars since independence from British rule in 1947, both claim the region in full, but rule it in part.