Hundreds of residents of Baramulla town took to streets to protest what they alleged ransacking of their houses by the army in the area, official sources said.
The protesters pelted stones at the army personnel who allegedly opened fire to disperse them, they said.
Five persons were injured in the firing, the sources said adding one them later succumbed to injuries.
He was identified as 25-year-old Tahir Latief Sofi, they said. The condition of one of the injured was critical.
Reinforcements had been rushed to the trouble-torn area to maintain law and order, they said.
An army spokesman said he was collecting details about the incident.
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