SRINAGAR, India, July 11 (Reuters) - India imposed federal rule in Kashmir on Friday after the state government fell over a controversial transfer of land to a Hindu shrine trust that sparked days of rioting in the Muslim-dominated region.

The government land move sparked some of the biggest protests from Muslims last month since a separatist movement broke out in the region in 1989. At least six people were killed in the protests and hundreds injured.

An official statement said the state governor had dissolved the assembly.

It was the third time since a separatist rebellion against Indian rule broke out in 1989 that federal rule has been imposed.

"N.N. Vohra (governor) sought the concurrence of the President of India for issuance of a proclamation to enforce governor's rule," an official statement read.

In the face of violent protests from Muslims, the Kashmir government withdrew its decision of transferring land to build shelters for Hindu pilgrims visiting the Amarnath cave to pray by an ice stalagmite considered sacred.

But the People's Democratic Party (PDP), a regional coalition party, still pulled out in protest and reduced the government to a minority.

Kashmiri separatist leaders had said by granting the land to a Hindu shrine trust, the government was trying to change the demography of Kashmir, India's only Muslim-majority state .

Direct rule is expected to last until next elections, due later this year.

Violence involving separatist guerrillas and Indian troops has declined in Kashmir after India and Pakistan who claim the region in full but rule in parts, began a slow-moving peace process in 2004.

People are still killed in shootouts and occasional bomb attacks, officials said.

A policeman was killed and two others wounded on Thursday when militants threw a grenade at a police patrol in northern Kashmir, police said. (Reporting by Sheikh Mushtaq; Editing by Bappa Majumdar and Bill Tarrant) (For the latest Reuters news on India see: http://in.reuters.com, for blogs see http://blogs.reuters.com/in/)

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