Security forces on Wednesday stormed a hotel from which suspected Islamic militants opened fire on a paramilitary base in the center of Indian Kashmir's main city. Three policemen were killed in the raid, a police officer said.

Another eight police officers and four civilians were wounded in the ongoing operation, said Deputy Inspector-General of Police Farooq Ahmed, who was coordinating the assault in central Srinagar.

In a separate incident in the village of Grend Nar, 50 miles south of Srinagar, the army killed two key commanders of a rebel group, Lashkar-e-Tayyaba, who were hiding in the village, said army spokesman Col. Hemant Juneja.

Juneja identified them as Abu Maaz, chief commander of the outlawed group's operations in the Indian portion of Kashmir, and Abu Qasim, a divisional commander of the insurgent group.

There was no comment from the group or independent confirmation of the army's claim.

In Srinagar, the tense standoff — punctuated by sporadic automatic gunfire and grenade blasts — was sparked when the gunmen opened fire from the building on a nearby paramilitary base, said Ahmed.

"Our forces are clearing the hotel room by room," said Ahmed. Intermittent gunfire could be heard as the forces entered the building.

At least nine armored vehicles were parked outside the hotel and a dozen jeeps filled with soldiers pulled into the area and surrounded the hotel in the heart of Srinagar.

Police cordoned off the area, trapping dozens of residents of nearby buildings in the busy Lal Chowk area of the city. Ahmed said police rescued three students staying in the hotel.

The manger of the Standard Hotel, the scene of the standoff, and another man were shot and wounded, said Manzoor Ahmed, a doctor at the local hospital. The manager, Abdul Rashid, was in a serious condition, he said.

Speaking to reporters after surgery to remove several bullets, Rashid said two heavily armed men had burst into his hotel and opened fire on a nearby policeman. The gunmen let him go but he was caught in the crossfire as he tried to flee, he said.

A Kashmiri militant group, Al-Mansorian, claimed responsibility for the attack. An unidentified man, claiming to be a spokesman for the group, told the local Current News Service that three of its men carried out the attack.

Al-Mansorian is one of the smaller groups operating in the area.

Anti-India sentiment runs high in Kashmir, India's only Muslim-majority state, where most people favor independence from Hindu-majority India or a merger with Pakistan.

Kashmir is split between India and Pakistan, but both countries claim the Himalayan region in its entirety.

More than a dozen Islamic rebel groups have been fighting security forces in Indian Kashmir since 1989. More than 68,000 people, most of them civilians, have died in the conflict.

Also Wednesday, hundreds of furious villagers protested after a brother and sister were killed and their spouses wounded in a shooting blamed on the army.

The four were working in their maize field late Tuesday night when soldiers on patrol fired at them in Gadool village, 65 miles south of Srinagar, residents said, speaking on condition of anonymity due to fears of retribution.

"It was a case of mistaken identity. The army regrets the killings," army spokesman Col. Juneja said. The state government has ordered an inquiry.

As word spread of the shooting, hundreds of residents protested in the streets of the village, chanting slogans against India and the military.