SRINAGAR, India, Jan 7 (Reuters) - Indian soldiers were fighting a handful of separatists holed up in mountain caves Kashmir in a week-long battle that has killed seven people so far, officials said on Wednesday.

The gunbattle broke out a week ago in the remote and rugged mountains of Poonch near the Line of Control, a military control line that divides disputed Kashmir between India and Pakistan.

"Heavy winter fog, thick forests and difficult terrain is causing hindrance and making operations difficult," Indian security official Sunil Kumar said.

"It is estimated that there are approximately 6-7 militants holed up in the caves," he said.

Officials say three soldiers and four militants have been killed in the battle so far.

Overall violence has fallen significantly across Kashmir since India and Pakistan began slow-moving peace talks in 2004. But New Delhi paused that dialogue after the November Mumbai attacks, which it blames on Pakistan-based militants.

The nuclear-armed neighbours, who have fought two of their three wars since 1947 over Kashmir, claim the disputed Himalayan region in full but rule it in part.

Officials say more than 47,000 people have been killed in nearly two decades of violence involving Indian troops and Muslim guerrillas in Kashmir. Rights groups put the toll at 60,000 dead or missing. (Reporting By Sheikh Mushtaq; Editing by Krittivas Mukherjee and Paul Tait)

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