A police raid that killed three militants holding hostages at a mosque has sparked angry protests in Indian-controlled Kashmir.

Thousands of people in the Palnoo village in the southern district of Kulgam demonstrated against the police action Tuesday. 

Authorities said three of the five hostages escaped Monday when they were allowed to leave the mosque for food, but refused to go back.

The other two hostages were freed after police fired teargas shells into the mosque, forcing the militants into the open, where two were killed. The third militant fled to one of the mosque's minarets where he died in an exchange of gunfire with police.

Various Islamic militant groups have been fighting for Kashmir's independence from predominantly Hindu India, with some groups demanding its merger with mostly Muslim Pakistan.

Some information for this report was provided by AFP and AP.