Hundreds of locals assembled outside the police station at Lolab in Kupwara district, 120 km from Srinagar, and demanded that they be shown the bodies of the slain ultras, police sources said.
The residents wanted to ascertain if there were any locals among the slain militants.
As the authorities turned down the demand, the agitated residents started pelting stones at the police station, the sources said.
They said the mob also set on fire two sentry posts of the police station following which police used tear smoke shells to disperse the protestors.
The situation was brought under control after the police allowed a group of elders to see the bodies, which were handed over to local Auqaf for burial.
Seven unidentified militants, all believed to be foreigners, were killed in an encounter with army and police in Dardpora forests of Lolab on Monday.
According to a senior police officer, the militants had recently infiltrated into the Valley.