At least 17 people, including four women, were injured when militants attacked a paramilitary bunker with a hand grenade at Batmallo in Srinagar late on Sunday afternoon.
Police said the injured were taken to the SMHS hospital for treatment. The condition of one person is stated to be critical.
The militants tossed the grenade at a Border Security Force bunker located inside the main bus stand. The grenade, however, missed the target and exploded at a spot where a large number of commuters were waiting.
Police and security forces surrounded the bus stand. "We conducted searches. However, no one was arrested," said a police officer.
No group has yet claimed responsibility for the explosion.
Meanwhile, militants shot dead a zonal president of the ruling People's Democratic Party hours after abducting him.
Sources said Tariq Ahmad was abducted late on Saturday from his home at Awantipore on Srinagar-Jammu national highway in south Kashmir's Pulwama district. The police recovered his body from a nearby field on Sunday morning.
No one has yet claimed responsibility for the crime.