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Indian security forces battled rebels in villages along the border in Kashmir and suspected insurgents detonated a grenade in a busy market Thursday, in violence that left 12 people dead.

Elsewhere along the 700-mile Indian-Pakistani frontier, the armies of the two countries held their fire for a second day in the first formal cease-fire between the two nuclear-armed neighbors in 14 years.

Relatives and friends mourn near the body of Randir Singh Nerola at a hospital in Srinagar, India, Thursday, Nov. 27, 2003.   [AP]

But the separatists have vowed to persist with their attacks in Kashmir despite the cease-fire, and New Delhi said it would continue targeting suspected militants infiltrating its area of Kashmir.

A shopkeeper was killed by a grenade at a security checkpoint at Lal Chowk, Srinagar's commercial hub, police officer Javed Ahmed said. Nine passersby were wounded.

Four suspected rebels were killed in a pre-dawn gunbattle in the village of Nowgam, about 60 miles north of Srinagar. Ahmed said the suspected militants were surrounded by security forces in the village.

Authorities said the militants belonged to Hezb-ul-Mujahedeen, a Pakistan-based militant group and the largest of a dozen groups fighting Indian troops in Kashmir.

Also near the Line of Control, a police officer was shot and killed by unidentified gunmen in the town of Hundwara, Ahmed said. Rebels were suspected in that attack.

Separately, four militants were killed after a gunfight broke out when a joint patrol of police and Indian army spotted a group of guerrillas in a remote mountainous area of Udhampur district, said a police officer. Udhampur is about 80 miles north of Jammu, the winter capital of India's only Muslim-majority state.

Also, soldiers of the Border Security Force shot dead two suspected militants near the Ghat area of Doda district, about 100 miles northeast of Jammu.

Indian army Lt. Col. Mukhtiar Singh said Thursday there had been no shooting reported along the Line of Control or the international border. Likewise, Pakistan military's spokesman Gen. Shaukat Sultan also said there were no reports of any cease-fire violations in Pakistani Kashmir.

The sudden peace has been cause for celebration for most frontier villagers, who often huddle in shelters as the two armies exchange gunfire and mortar rounds.

India said Monday that an enduring cease-fire would depend on Pakistan ending the infiltration of Islamic militants into India's portion of Kashmir.

Both countries claim all of the Muslim-majority region, which is divided between them by the 1972 cease-fire line called the Line of Control. They have fought two wars over the region since independence from Britain in 1947.

More than 65,000 people, mostly Muslim civilians, have died since 1989, when the Islamic insurgency began to wrest away India's portion of the region.

Pakistan denies India's contention that the militants are trained, funded and armed by the Pakistani military and spy agency, but the Islamabad government says it supports the militants' goals.

Last year, Pakistan and India almost went to war following an attack on India's Parliament. New Delhi blamed the suicide attack on Islamic militants and Pakistan's spy agency — an accusation Islamabad denies.

Relations have been improving since April. India and Pakistan have restored their ambassadors and resumed a bus line and are negotiating a resumption of air links.

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