The Indian army has admitted to extra-judicial killings of militants, a US-based human rights group says.
There is heavy security deployment in Indian-administered Kashmir
The Human Rights Watch report on the situation in Indian-administered Kashmir also criticises the militants and Pakistan for abetting violence.
The report says the situation in Kashmir has improved over the past two years, but it is still severe.
Since 1989 when militancy began in Kashmir, the report says more than 50,000 people have been killed.
Releasing the 156-page report, Everyone Lives in Fear, the Asia Director of Human Rights Watch, Brad Adams, said extrajudicial executions by Indian security forces were common.
"Police and army officials have told Human Rights Watch that security forces often execute alleged militants instead of bringing them to trial in the belief that keeping hardcore militants in detention is a security risk," he said.
"Most of those summarily executed are falsely reported to have died during armed clashes between the army and the militants," he added.
A soldier keeps vigil on the streets of Srinagar
Mr Adams said the immunity given to security force personnel deployed in Kashmir encourages them to commit violations.
"It is absurd that the world's largest democracy, with a well-developed legal system and internationally-recognised judiciary, has laws on its books that prevent members of its security forces from being prosecuted for human rights abuses," he said.
Reacting to the report, Indian army spokesman in Delhi Col Sakhuja said: "In the recent past some cases of fake encounters have come to light and we have taken action in those cases.
"But it is a sensitive issue and it will not be right for us to comment on it until we have seen the entire report."
Critical of militants
Human Rights Watch is also critical of the militants who are fighting Indian rule for attacking civilians.
"Indian security forces claim they are fighting to protect Kashmiris from militants and Islamic extremists, while militants claim they are fighting for Kashmiri independence and to defend Muslim Kashmiris from an abusive Indian army," says the report.
It adds that, "in reality, both sides have committed widespread and numerous human rights abuses and violations of international humanitarian law."
The report says the militants "have attacked religious minorities such as Hindus and Sikhs as well as ethnic minorities such as the Gujjars whom they believe to be government informers".
Many of the militant groups currently operating in Kashmir have become increasingly unpopular, says the report. But, it adds, "the people are afraid to speak out against them."
'Pakistan backing militants'
Pakistan's role also came in for criticism.
"There is considerable evidence that over many years Pakistan has provided Kashmiri militants with training, weapons, funding and sanctuary," Mr Adams said.
The report says that under pressure from the US after the attack on the World Trade Centre in New York in 2001, Pakistan has banned some militant groups like Jaish-e-Mohammad and Lashkar-e-Toiba.
But these groups continue to operate after changing their names, says the report.
Mr Adams says the militants and their backers must end the bombings and the targeting of civilians.
"Continued abuses ensure that the cycle of violence will continue. And these abuses only add to the suffering of the people in whose name the militants are ostensibly fighting." he said.