Srinagar, India: An Indian soldier and two suspected rebels were killed Friday in a gun battle in northern Indian-administered Kashmir as tensions along the de facto border with Pakistan flared again this week.

The Indian army, which maintains a heavy presence in the disputed territory, said that the two separatist rebels had clashed with soldiers in Naidkhai, just north of the main city Srinagar.

"Two terrorists were killed and a soldier was martyred. Two weapons and a grenade launcher were recovered from the site of the encounter," Colonel Rajesh Kaia said.

The Indian army resumed its counterinsurgency operations recently after months of mass protests against Indian rule left more than 90 civilians dead and thousands more injured.

The protests have largely subsided but a crackdown on suspected protesters is continuing.

Meanwhile, tensions between nuclear-armed rivals India and Pakistan have surged after a recent uptick in military activity by both sides across the disputed border, known as the Line of Control.

Sixteen people were killed this week in cross-border firing, including nine civilians on the Pakistani side who died when their bus was hit.

That came a day after India said three of its soldiers were killed in a sneak-in attack from the Pakistani side. 

The United Nations once again urged calm on Thursday, seeking to prevent a repeat of the dangerous rhetoric between the neighbours that followed a deadly raid on an Indian army base in September, blamed on Pakistan-based militants.

Repeated outbreaks of cross-border firing followed that attack, with both sides reporting deaths and injuries including of civilians.

"(UN Secretary-General Ban Ki Moon) calls on all involved to prioritise the restoration of calm and stability in order to prevent any further escalation and loss of life," the world body said in a statement. 

Kashmir has been divided between India and Pakistan since the end of British colonial rule in 1947. Both claim the territory in full.

Several rebel groups have fought for decades the 500,000 Indian troops deployed in the territory, demanding independence for the Himalayan region or a merger of the territory with Pakistan.

Tens of thousands, mostly civilians, have been killed in the fighting.