Masked men were holding the Pakistani flags when the separatist leader took out the procession from Jamia Masjid in Nowhatta area as part of a series of events organised on the eve of 26th death anniversary of his father Mirwaiz Maulvi Farooq.
"Pakistani and green (Islamic)flags were waved by a group of youthat the rally led by Hurriyat Conference chairman Murwai Umar Farooq," a police official said.
The official said police is investigating as to who waved the controversial flags.
Mirwaiz Maulvi Farooq was killed by two gunmen on May 21, 1990 at his residence here.
In 2011, senior Hurriyat leader Abdul Gani Bhat had said that Farooq had been killed by "our own people".
The state government has maintained that that then Hizbul Mujahideen commander Mohammad Abdullah Bangroo had killed Farooq.