At least two militants appeared at the funeral in Tantraypora village and fired dozens of rounds in honor of their fallen comrades.
Villagers said troops blasted two civilian homes with explosives during the operation.
The spokesperson further said that over 110 people mostly young boys were injured after Indian forces used excessively brutal forces, bullets, pellets and teargas shells on defenceless Kashmiris during peaceful protests in occupied Kashmir.
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Large protests and clashes against Indian rule spread to several other places across Kashmir, including the Himalayan region's main city of Srinagar, as students boycotted classes and hit the streets.
The puppet administration ordered immediate suspension of Internet services and closure of all schools and colleges in the valley.
Authorities closed all educational institutions for a day as a "precautionary measure", said Baseer Khan, a top civilian administrator.
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The bloodshed comes just days after the death of Abu Dujana, the commander of the Pakistan-based Lashkar-e-Toiba militant group, was killed by Indian security forces.
Kashmir has remained a bone of contention between Pakistan and India since independence. The anti-India protests and clashes have persisted despite the Indian army chief warning recently that "tough action" would be taken against stone throwers during counterinsurgency operations.
Kashmir, the Himalayan region divided between India and Pakistan is claimed by both in full.
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Rebel groups in the Indian-administered region have waged a almost three-decade insurgency seeking either independence or a merger with Pakistan that has killed tens of thousands of people. Anti-India sentiment runs deep among Kashmiris which is why they support the freedom activists despite decades long Indian rule through forced occupation.