A deadly blast on Saturday evening killed one person and wounded 45 others in the saffron-rich Pampore town of Pulwama district, 20 km from Srinagar.

Police said militants hurled a powerful hand grenade at a posse of local police busy patrolling the area at Drangbal in Pampore town.

"One woman, identified as Farida Jan, was killed on the spot in the explosion that occurred when a large number of people were thronging the Drangbal chowk area. 45 others, including 38 civilians and two policemen, were wounded in the explosion," a senior police officer told this correspondent in Srinagar.

All the injured were evacuated to Srinagar where attending doctors described the condition of five of the injured as critical.

The explosion caused widespread panic in Pampore town, which was closing after the day's business. Shopkeepers, pedestrians and commuters ran helter skelter looking for cover even as the traffic on the highway, which passes through the town, was disrupted.

Pampore is famous for its saffron cultivation throughout south Asia and some of the best quality saffron grown here is exported to different countries.

Meanwhile, the opposition National Conference on Saturday demanded that the Centre should engage separatist groups in parleys on the pattern of the Centre-Naga rebel dialogue.

"The Centre must engage the separatist leaders and armed groups in a dialogue on the pattern of the parleys being held with the Naga rebels," NC president Omar Abdullah told a party rally in Srinagar.

Saturday's NC rally was held under heavy security in Srinagar.