Members of the separatist Jammu Kashmir Liberation Front (JKLF) clashed with police in Rajouri on Wednesday over the alleged burning of an Islamic State (IS) flag by members of the Vishwa Hindu Parishad.
The flag was allegedly burnt by a section of Vishwa Hindu Parishad on Tuesday.
The protesters clashed with police while raising slogans to protect Muslims from being targeted in Jammu.
JKLF vice chairman Bashir Ahmad Bhat said, "Since the time the BJP got power in Jammu after dividing the Muslims, they think they have won Jammu and now only Hinduism-related works will be done there. Others are not being allowed to live freely; especially the Muslims are being tortured there."
"We are doing this agitation so that the BJP and the PDP understand that any kind of discrimination against the Muslims in Kashmir will not be tolerated. If they understand it, it is good, and if not they will have to face the brunt," he added.
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IS pamphlets and flags have appeared in parts of Pakistan and India, alongside signs that the ultra-radical group is inspiring militants even in the strongholds of the Taliban and Al Qaeda.
IS flags had first appeared in Kashmir in October last year, but the then Chief Minister Omar Abdullah had reportedly downplayed the incident.
Meanwhile, curfew continues to remain in force in Rajouri town for the second day on Wednesday.
The unrest is the latest challenge for Prime Minister Narendra Modi's Hindu nationalist BJP, which this year took control of the Kashmir government in alliance with a regional partner, the first time it has been in power in the state.