A large explosion rocked the center of Indian Kashmir's main city on Friday outside the heavily guarded home of the state's chief minister.

After the explosion, police and troops were locked in a gunbattle with unknown men in a nearby shopping center in the summer capital Srinagar, witnesses said.

It was not immediately clear if Chief Minister Mufti Mohammad Syed, elected a year ago to bring a healing touch to the revolt-racked region, was at home at the time.

Live television pictures showed at least one soldier lying on the ground and others running through the streets, accompanied by the sound of automatic gunfire.

The attack was the latest in a rising cycle of violence that has undermined efforts to restore relations between nuclear powers India and Pakistan, which came close to war over Kashmir last year.

New Delhi accuses Islamabad of sponsoring Muslim militants fighting Indian rule in its only Muslim-majority state, charges Pakistan denies.

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