(Adds details, clash on border)

By Sheikh Mushtaq

SRINAGAR, India, Aug 16 (Reuters) - Tens of thousands of Muslims marched in Indian Kashmir on Saturday to pay homage to a separatist leader killed by police in protests over a land row that is testing New Delhi's hold on the troubled region.

Sheikh Aziz was among at least 22 Muslim protesters killed when police opened fire this week during some of the biggest protests since a separatist revolt broke out in the region 20 years ago.

The dispute over land allocated to Hindu pilgrims visiting a shrine in Kashmir has snowballed into full scale anti-India protests, uniting separatists and reviving calls for Kashmiri independence.

The row pits Muslims in Kashmir against Hindus in Jammu, the two main regions which make up the Indian state of Jammu and Kashmir, in one of the toughest challenges facing Prime Minister Manmohan Singh's government since it took office in 2004.

On Saturday, protesters carrying black and green Islamic flags headed for Aziz's hometown, Pampore, about 12 km (7 miles) from Kashmir's summer capital Srinagar. Aziz was a leader of Kashmir's main separatist alliance, the All Parties Hurriyat (Freedom) Conference.

"There is no god but Allah, Indian forces go back," the protesters shouted.

Thousands of mourners, carrying photographs of the slain leader, flooded into Pampore by bus, car and motorcycle, witnesses said.

BORDER CLASH

The crisis has also raised tensions with nuclear rival Pakistan. India has criticised Islamabad for interfering in its internal affairs by calling for U.N. intervention in the region that both claim in full but rule in parts.

Late on Saturday, Indian soldiers shot dead two suspected militants when a group of guerrillas tried to sneak into Indian Kashmir from the Pakistani side, an army spokesman said.

He said an Indian soldier was also killed in the clash in Uri sector on the Line of Control, a ceasefire line dividing Kashmir between India and Pakistan.

The crisis in Indian Kashmir began after the state government promised to give forest land to a trust that runs Amarnath, a cave shrine visited by Hindu pilgrims. Many Muslims were enraged.

The government then rescinded its decision, which in turn angered Hindus in Jammu who attacked lorries carrying supplies to the Kashmir valley and blocked the region's highway, the only surface link with the rest of India.

Kashmiris, challenging the blockade, took to the streets.

"People have given their verdict that they won't tolerate oppression and injustice. It is time for New Delhi to act and solve the dispute," Hurriyat chairman Mirwaiz Umar Farooq said on Saturday.

(Editing by Tony Tharakan and Robert Hart)

(For the latest Reuters news on India see: in.reuters.com, for blogs see blogs.reuters.com/in/)

AlertNet news is provided by