The bodies of the three militants were handed over to their respective families on Saturday morning and a big funeral was held for Mattoo in which people from different parts of south Kashmir participated.
A shootout ensued, and several civilians were caught in the crossfire.
Mattoo was killed along with two of his associates in Arwani village of the district district in a gunfight with the security forces on Friday.
Thousands of people also attended the funeral prayers of two other militants -- Adil at Frestbal, Pampore and Nasir at Heff village of Shopian respectively.
Khar, a resident of Kharpora Arwani area, was rushed to district hospital at Bijbehara where he was declared brought dead, police said.
Police said Mattoo was also involved in an attack in which three policemen, including an officer, was killed a year ago.
The militants killed in encounter have been identified as Junaid Matto, Nasir Wani and Adil Mushtaq Mir. The terrorists also reportedly disfigured the faces of the cops and stole their AK-47 rifles. The police were not travelling in bullet proof vehicle.
A reward of Rs 10 lakh has been announced for anybody providing information on Wani and his fellow-militants. He was involved in Mirbazar police party attack where police official Mehmood attained martyrdom.
The escalation in violent attacks on Jammu and Kashmir police personnel is because of the "frustration" of the ultras, Director General of Police S P Vaid said on Friday, asserting that necessary measures would be taken to prevent them from carrying out such acts.
Authorities suspended mobile internet services in the Valley to prevent mobilisation of stonepelters and mobs.
Communist Party of India (Marxist) leader Mohammed Yusuf Tarigami said the incidents in south Kashmir were a clear example of lawlessness prevailing in the entire area. Twelve protesting civilians were injured in these clashes.
In a reference to former outfit head Zakir Musa, Yatoo dismissed reports of differences between militant outfits as misinformation planted by Indian agencies.