Fire gutted one of the most revered Sufi Muslim shrines in Kashmir on Monday sparking clashes between police and angry Muslim protesters, witnesses said.

Kashmir has long been plagued by violence over a campaign by some of its mostly Muslim residents, helped by supporters in neighbouring Pakistan, to break away from India.

Authorities say rebel violence has recently fallen to its lowest level since the anti-India revolt broke out in 1989, but Monday's clashes will be a reminder of how volatile the region can be.

At least six people were hurt in Srinagar when police fired teargas at stone-throwing protesters enraged over the destruction of the 350-year-old wooden shrine which housed a relic of Sheikh Abdul Qadir Jeelani, an 11th century Sufi saint, police said.

Rioters torched a fire engine and threw stones at firefighters and some members of the media.

"After morning prayers, fire started from the roof top of the shrine. We're still trying to determine the cause," said Farooq Ahmad, a police official at the scene.

"The holy relic of the Sufi saint is safe and has been retrieved."

Police sealed off roads leading to the shrine where hundreds of men and women had gathered, many of them wailing and crying.

"I feel like I've lost everything," cried a 45-year-old woman, Shameema Akhtar, tears rolling down her cheeks.

Muslim militants spearheading the anti-India campaign in Kashmir have in the past tried to enforce a radical form of Islam, banning beauty parlours, cinemas and liquor shops, as well as asking women to wear the veil.

But they have had little success in a region where people mostly follow Sufiism, a gentle, mystic tradition of Islam.

Tens of thousands of people have been killed in the years of strife in the region that both of the nuclear-armed rivals, India and Pakistan, claim. Pakistan controls part of Kashmir in the west.