10,000 people participated in the protest, making it the largest demonstration so far.
The demonstration that followed on Friday, subsequent to the prayers, has been the largest since authorities locked down the revolt-torn region five days ago, cutting off telephone and internet services and detaining more than 500 political and separatist leaders.
Seeking to tighten its grip on Kashmir, that is also claimed by neighboring Pakistan in its entirety, India scrapped Article 370 this week that enabled Jammu and Kashmir's right to frame its own laws - a separate constitution, a state flag and autonomy over the internal administration of the state.
The scrapping of this decree will allow non-residents to own property in the Indian administered valley, revoking decades-old customs.
Regional leaders have warned of a backlash in the area, where militants have been fighting Indian rule for nearly 30 years, leading to the deaths of more than 50,000 people.
A large group of people gathered in Srinagar's Soura area, a police officer said, in violation of orders that prohibit the assembly of more than four people.
Indian police used tear gas and pellets to fight back at least 10,000 people protesting Delhi's withdrawal of special rights for Muslim-majority Jammu and Kashmir state in its main city of Srinagar on Friday, a police officer and two witnesses said to Dawn.
“Some women and children even jumped into the water,” a witness said at Srinagar’s Sher-e-Kashmir Institute of Medical Sciences, where pellet-hit victims were admitted.
“They (police) attacked us from two sides,” another witness said.
The police officer said 12 people had been admitted to two hospitals in the city after enduring pellet injuries at Soura, and with this, the total injured in the protests this week has escalated to at least 30.
“There were around 10,000 people at the protest in Soura,” the police officer said. “This was the biggest so far.”
Thousands of extra paramilitary police were deployed across Kashmir just before the sweeping measures were announced on Monday to prevent large-scale protests.
An Indian foreign ministry spokesman, Raveesh Kumar, played down the unrest, which he suggested was temporary.
“Just outside Srinagar things have really come back to normal,” he said.
Kumar added, “People are going about their business, vehicles are plying normally. If we are confident of maintaining the law and order, I think those restrictions will be relaxed, I'm quite sure.”
Addressing the nation on Thursday, Indian Prime Minister Narendra Modi said he had acted in Kashmir to help develop the region and that he hoped it would lead to investment and more job opportunities.
His Hindu nationalist-led party has long campaigned for abrogating Kashmir's special privileges in the constitution, which it sees as an appeasement to Muslims and a hindrance to its own development.
“Over 500 people have been arrested since Sunday including former chief ministers, ministers, lawmakers and leaders and workers from political parties and separatist groups,” an anonymous police officer said.
Within Kashmir, officials are hoping anger will die down. On Friday, they eased restrictions to allow residents to offer prayers in neighborhood mosques and said they were making arrangements for Eid, that falls on Monday.
The top administrative official of the Kashmir Valley, Baseer Khan, said that essential commodities including food, grains and meat, would be trucked into villages by Sunday.
Baseer Khan also said authorities would set up public phone booths covering every district since communications lines have been severed by the government anticipating widespread protests.
“More than 300 phone booths will be established in a day or two at landmark points,” he said
Baseer Khan said that all medical services in the valley were working normally, although when Reuters visited two major hospitals and a smaller facility, officials said that doctors and staff were having difficulties reaching work.
On the same day as the latest demonstration, senior Chinese diplomat Wang Yi said China was gravely concerned about the geopolitical situation in Kashmir upon meeting Pakistan's Foreign Minister Shah Mahmood Qureshi in Beijing.
Wang assured him that China would continue to support Pakistan to safeguard its legitimate rights and interests, the Chinese Foreign Ministry said in a statement.
Modi's administration including some top opposition leaders have welcomed the decision to absorb Kashmir fully into India and it has brought him support across the country.
To retaliate the Modi administration’s move, Pakistan has downgraded diplomatic ties with India and suspended trade.