Srinagar and other parts of the Muslim-majority Kashmir valley have recently been rocked by some of the biggest protests since an anti-India insurgency erupted in 1989.
Street battles this week have left at least 22 dead -- all of them Muslim youths -- and hundreds injured in police firings.
On Friday, thousands of Muslim separatists -- whose leaders called for a boycott of India's independence celebrations -- waved black flags as they marched through Srinagar, chanting "We want freedom" and "Kashmir is ours".
Thousands of worshippers emerged from the city's main mosque after Friday prayers and burnt several Indian flags, witnesses said.
The rally came despite tight security in the city, where a curfew was lifted after four days. A general strike emptied roads and closed shops.
There were no reports of disruption to official functions marking India's 1947 independence, which sowed the seeds of the Kashmir dispute.
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