At least seven people have been killed and more than 30 injured in a car bomb explosion in Indian Kashmir. This is the latest incident in a week of rising violence between Muslim separatists and government forces.

The bomb exploded in a busy fruit market on the outskirts of Kashmir's summer capital, Srinagar, as an army convoy was passing by.

There was panic in the area after the blast. Shopkeepers pulled downed their shutters and fled, while people searched for relatives in the blast wreckage. Officials say the bomb was in a car parked near the gate of the fruit market.

Police say most of the victims were civilians, but an Indian army brigadier and several soldiers were also among the wounded. A group called Hizbul Mujahideen claimed responsibility for the blast.

Separately, at least two suspected rebels were killed in Kashmir in an overnight fight, while an army officer died in a gun battle with guerrillas in a village about 70 kilometers north of Srinagar.

In the past week, more than 70 people, including civilians, soldiers and Muslim militants, have been killed in Kashmir.

Indian officials say violence in the province has risen to new levels as Muslim militants seek to avenge the killing by Indian security forces last week of a leading Islamic guerrilla commander, Gazi Baba.

The renewed violence has broken a relative calm in the province that followed steps by India and Pakistan in April to ease tensions between them.

Kashmir's chief minister, Mufti Mohammad Sayeed, told Indian television that people in Kashmir long for stability, and that the latest attacks will not deter him from efforts to bring peace to the region.

Mr. Sayeed said the process of restoring normalcy to the region should be maintained. He repeated the advice he gave at recent conference: "We have to learn to live with it."

More than a dozen Muslim militant groups are fighting either for Kashmir's independence from India or for the province's merger with Pakistan. The region is divided between the South Asian rivals and claimed in its entirety by both.

New Delhi accuses Pakistan of funding, arming and training the Islamic guerrilla groups, while Islamabad denies the accusation. Political analysts say the recent violence in Kashmir could set back efforts to open peace talks that both countries say they want.