Militants stormed a government building in Indian-controlled Kashmir (search), setting it on fire with 70 employees trapped inside, police said Friday. At least three people were killed, an official said.

Three militants made their way into the government tax building, hurling a hand grenade that set off a blaze, a police officer said on condition of anonymity.

Government forces surrounded the building, said K. Srinivasan, deputy inspector general of the Border Security Force (search). Gunfire was being exchanged between the militants and soldiers outside.

"We are trying to storm the building from two sides with two objectives — one to put out the fire and second to evacuate the civilians safely," Srinivasan said.

One paramilitary soldier, one civilian and one militant were killed, he said.

More than a dozen militant groups have been fighting security forces in India's Jammu-Kashmir state since 1989, seeking independence for the Himalayan region or its merger with neighboring Pakistan.

More than 66,000 people, mostly civilians, have died in the conflict.