Bodies of the three were found in an orchard about 30 kms from here in Pattan in Baramulla district this morning.
Two of them were later identified as Aamir Qadir Reshi of Sopore and 23-year-old Ashiq Wani of Lolipora of Pattan, police said, adding efforts were underway to identify the third one.
Reshi and Wani have been associated with Lashker-e-Islam, a breakaway outfit of Hizbul Mujahideen formed by its rebel leader Abdul Qayyum Najjar, sources said.
Police said the three could have been killed by Hizbul Mujahideen members led by Fayaz Wailoo, who has reportedly been tasked to neutralise members of the Najjar faction.
Najjar broke ranks with Hizbul Mujahideen chief Syed Salahuddin earlier this year to float his outfit which carried out attacks on mobile towers and other telecommunication installations despite being warned not to do so.
He was also responsible for killing of some separatists sympathisers in Sopore who were associated with Hurriyat Conference led by Syed Ali Shah Geelani, sources said.
"The protestors resorted to stone-pelting on law enforcing personnel. Additional forces have been rushed to the area to bring the situation under control," police said.
Working President of opposition National Conference and former Chief Minister Omar Abdullah expressed sorrow over the mysterious killing of the three youth and demanded a high-level probe into the incident.
"The killing of the youth is inhuman and heart-rending act....A high-level probe should be immediately ordered into the incident," Omar said in a statement here.
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