Suspected Islamic militants blew up an army vehicle and hurled a grenade into a crowded market in the troubled Indian state of Jammu-Kashmir on Thursday, killing three soldiers and injuring at least 25 people, police said.

Guerrillas attacked the army vehicle in Chandanwari, about 70 miles south of the city of Srinagar, according to a police officer, who spoke on condition of anonymity.

The market was attacked in the nearby city of Anantnag. Among the injured were 20 civilians and five paramilitary soldiers, a local police officer said.

Few other details were immediately available. The officer said Muslim militants were suspected of carrying out the attack.

More than a dozen Muslim guerrilla groups have been fighting for Jammu-Kashmir's independence or merger with Islamic Pakistan since 1989. Jammu-Kashmir is the only Muslim-majority state in mostly Hindu India.

India accuses Pakistan of aiding, training and funding the 12-year insurgency, which has left more than 60,000 people dead. Islamabad denies the charge.

The two countries have fought three wars since gaining independence from Britain in 1947, two over the Kashmir region, which is divided between them.

The South Asian nuclear rivals recently came close to fighting a fourth war following a spate of terror attacks in India, which New Delhi blamed on Pakistan-based groups. War was averted with the help of intense diplomatic efforts by the United States and Britain, but nearly a million troops still remain massed along the India-Pakistan frontier.

India's Defense Minister George Fernandes said on Thursday that hundreds of thousands of Indian troops would remain posted along the border for at least another four months.

"We cannot withdraw the forces until elections in Jammu and Kashmir are over and after that the decision depends on the situation," Fernandes said on arrival in the western state of Gujarat, one of five Indian states where troops are deployed along the 1,800-mile border with Pakistan. "They will remain there 'til October."

Prime Minister Atal Bihari Vajpayee is set to announce his first Cabinet shake-up, a senior minister said Thursday, amid reports that the country's finance minister is on his way out.

"The prime minister will inform the president about the changes on Monday evening," Cabinet spokesman and Parliamentary Affairs Minister Pramod Mahajan said. He declined to specify the changes, but Indian newspapers have been reporting for weeks that Finance Minister Yashwant Sinha will not remain in his job.

The upcoming changes are seen as an attempt by the 77-year old Indian leader, who came to power in 1999, to consolidate his influence within the 20-party governing coalition as well as in his Hindu nationalist Bharatiya Janata Party.

The stability of Vajpayee's coalition, which has a thin majority in Parliament, came under threat earlier this year after Hindu-Muslim violence erupted in Gujarat, killing nearly 1,000 people.

The government also plans to hold elections for the state legislature in Jammu-Kashmir in October, and is concerned that militants infiltrating from Pakistani Kashmir may disrupt them as they have in the past.

The troops were mobilized after a Dec. 13 attack on the Indian Parliament which New Delhi blamed on Islamabad's spy agency and two groups based in Pakistan. Pakistan and the militants have denied the charge.

In talks with U.S. officials earlier this month, Pakistani President Gen. Pervez Musharraf pledged to end infiltrations, and Indian officials have conceded that the number of incidents has decreased.