Hundreds of people thronged a site where security forces had besieged a group of militants, throwing rocks at soldiers in a bid to help the militants escape, witnesses said.
One protester was also killed in the resulting clashes with troops in Qazigund village, north of Srinagar.
The Indian occupied Kashmir (IoK), where freedom fighters groups have been fighting Indian forces for decades, has seen a spike in violence in recent months.
Three militants were killed and 12 security forces wounded on Thursday during a clash in southern Reasi district. Two others were shot dead the same day in the northern town of Sopore.
The forces were conducting a search operation after an intelligence tip when the militants opened fire, sparking the siege, police said.
Anti-militant operations have been stepped up since the killing of four police. There have also been rising tensions over a Supreme Court hearing on privileges for Kashmiris that was delayed due to the risk of violence.