Soldiers in India-administered Kashmir carried out a large-scale manhunt on Monday, the government said, a day after nine Hindu pilgrims were killed in one of the deadliest attacks on civilians for years.

Around an hour before Hindu-nationalist Prime Minister Narendra Modi was sworn in for a third term in the capital New Delhi on Sunday evening, gunmen in Kashmir ambushed the bus packed with Hindu pilgrims celebrating after visiting a popular shrine.

Police said Monday the attackers fired on the bus hitting the driver and three others, before it swerved off the mountain road into a ravine, killing nine including a child.

Dozens were also wounded.

"Three of those injured and the driver who died had bullet injuries," police officer Mohita Sharma told AFP, adding investigations continued.

Special forces and police officers were searching the Reasi area in the south of the disputed territory, deploying drones to scan the forested area from above.

Officials said India's anti-terrorism task force, the National Investigation Agency, has also started probing the incident.

Kashmir's top political official Manoj Sinha said a joint operation was "in progress to neutralise the perpetrators" who carried out the attack, announcing $12,000 in compensation for each of the families of those killed.

Top government official Amit Shah -- interior minister in the previous government, and who took the oath of office shortly after Modi -- warned that the gunmen would "face the wrath of the law".

"The culprits of this dastardly attack will not be spared," Shah said on social media late Sunday.

- 'Shameful' -

Kashmir has been divided between India and Pakistan since their independence in 1947, and both claim the high-altitude territory in full.

Rebel groups have waged an insurgency since 1989, demanding independence or a merger with Pakistan.

The conflict has left tens of thousands of civilians, soldiers, and rebels dead.

Violence and anti-India protests have drastically fallen since 2019, when Modi's government cancelled the region's limited autonomy.

But since then rebel groups have targeted Indians from outside the disputed territory and killed several.

Sunday's attack was the first on Hindu pilgrims in the Muslim-majority region since 2017, when seven were killed when gunmen opened fire on their bus in the Kashmir valley.

Opposition leader Rahul Gandhi called the attack "shameful" in a post on social media, saying that it revealed the "true picture of the worrying security situation in Jammu and Kashmir".

Five rebels and an Indian air force corporal were killed in clashes since election campaigning began in the territory in April, until voting ended this month.

Two suspected rebels were also killed in a firefight with soldiers on June 3.

But the vote saw a 58.6 percent turnout, according to the election commission, a 30-percentage-point jump from the last vote in 2019 and the highest in 35 years.

No separatist group called for a boycott of the election -- a first since the armed revolt against Indian rule erupted in the territory in 1989.

India regularly accuses Pakistan of supporting and arming the rebels, a charge Islamabad denies.