A Kashmiri separatist was executed Saturday over his role in a deadly attack on the Indian parliament in 2001 -- an episode that brought nuclear-armed India and Pakistan to the brink of war.

Mohammed Afzal Guru, a one-time fruit merchant, was hanged at New Delhi's Tihar Jail after President Pranab Mukherjee rejected a mercy appeal. He was only the second person to be executed in India in nearly a decade.

With authorities fearing a backlash over the execution, a curfew was imposed in parts of Indian-administered Kashmir and the centre of the main city Srinagar was sealed off.

While India's main opposition party welcomed the execution, one of Guru's co-accused who was later cleared said it was a travesty of justice and the New York-based Human Rights Watch described it as "inhumane".

"Afzal Guru was hanged at 8:00 am. All legal procedures were followed," Home Minister Sushil Kumar Shinde told reporters.

Guru was woken three hours before his execution, a senior police officer told AFP. After the hanging, his body was buried inside the jail grounds, according to the Press Trust of India.

Guru was found guilty of conspiring with and sheltering the militants who attacked the parliament in December 2001.

He was also held guilty of being a member of the banned Islamist group Jaish-e-Mohammed, which fights against Indian rule in the divided Himalayan region of Kashmir, where a separatist conflict has claimed up to 100,000 lives.

Five Islamist militants stormed parliament in Delhi on December 13, 2001, killing eight policemen and a gardener before security forces shot them dead. A journalist who was wounded died months later.

India alleged the militants behind the attack were supported by Pakistani intelligence, leading the neighbours to deploy an estimated one million troops on their borders for eight months.

India's main opposition party, the Hindu nationalist Bharatiya Janata Party, welcomed the execution and said the "world could see India is committed (to) the fight against terror".

But the hanging drew bitter criticism from Muslim-majority Kashmir where leading separatist leader Mirwaiz Umar Farooq announced a four-day shutdown of the scenic region in protest.

"This execution will definitely strengthen our resolve and add a new chapter to the freedom struggle," said Farooq, the chief priest at Kashmir's main mosque.

Guru, who had insisted he was innocent and said he wanted to see his teenage son grow up, had been "framed", he added.

One of Guru's co-accused, S.A.R. Geelani, a college teacher, who was also sentenced to death but later cleared, said Guru never received a fair trial.

He added Guru's family were unaware that he had been executed but the government said they had been notified by express mail.

A group of lawyers who had campaigned for Guru's release said he had been found guilty on the basis of "fabricated evidence" and was denied proper legal representation in court.

As the decision to hang Guru emerged, security forces imposed a curfew in rural areas parts of Indian-administered Kashmir, with the announcement made by loudhailer as police patrolled the streets.

Although there was no formal curfew order in Srinagar, police hastily erected barricades across main entry roads and in the city centre in a bid to prevent any possible demonstrations while helicopters hovered overhead.

Executions are only carried out for "the rarest of rare" cases in India and Guru's is only the second since 2004.

The sole surviving gunman from the 2008 Mumbai attacks, Pakistani-born Mohammed Ajmal Kasab, was executed on November 21 last year.