The protesters, who were led by JKNPP chairman Harsh Dev Singh, protested at the Exhibition Ground here and accused the state government of appeasing anti-nationals and separatists in the Kashmir Valley.
They shouted anti-government slogans and demanded that the FIR be withdrawn.
Two civilians were killed when Army personnel fired at a stone-pelting mob in Shopian district of Jammu and Kashmir on Saturday, prompting Chief Minister Mehbooba Mufti to order an inquiry into the incident.
Singh claimed "the Army men fired in self-defence when a mob attacked them".
He alleged the government had earlier "buckled under pressure from separatists and directed police to register FIRs against Major Nitin Leetul Gogoi for countering stone pelters during the bypoll in Srinagar on April 9 last year".