One person was killed and three others were injured in a powerful blast inside a car in Udhampur town of Jammu region on Monday morning.
A senior police officer said the car had been parked near a roadside tea-stall on the strategic Jammu Srinagar national highway.
"A milk vendor was killed on the spot while three others, who were having tea at the stall, were injured in the blast. Senior police officers are already at the spot, collecting details," the officer said.
Some media reports indicated that militants triggered the blast in retaliation to the killing of Al Qaeda chief Osama bin Laden in Pakistan.
Security officials have now surrounded the area to conduct searches.