At least seven persons were killed and 28, including a senior army officer, injured when a powerful car bomb went off near the main fruit market in Srinagar's Parimpora area on Saturday morning.
Police said the explosives-laden car was parked on the highway near the fruit market.
"We have shifted the injured to various hospitals. Six of them have critical injuries," a police officer said.
Pro-Pakistan Hizbul Mujahideen has claimed responsibility for the attack.
Police said several passing vehicles and an adjacent shop were damaged in the explosion.
The area has been cordoned off and traffic on the highway has been halted.
Three of the six victims have been identified by the police as Aijaz Ahmad, Syed Masroor Shah and Mohammad Javed.
Violence in Kashmir has seen a sharp escalation since the death of Jaish-e-Mohammed commander Ghazi Baba in an encounter in Srinagar last week.