Threatening further attacks, the pro-Pakistan militant outfit said today's assault was carried out to show that "Mujahideens are still living in the hearts of Kashmiris".
The attack was also aimed at derailing the "so-called political process" in the state, said Jaleel Ahmed, an outift spokesman, in a faxed statement.
"The attack will continue on Indian forces and vital installations," he said.
Militants opened fire and hurled grenades in busy Lal Chowk, the nerve centre of summer capital Srinagar, at around 2:15 pm sending terrified people scurrying for cover.
They barged into a hotel and were still holed up there. The building had been ringed by security forces.
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