By Subir Bhaumik BBC correspondent in Calcutta

Locals say soldiers are to blame

Protesters say she was picked up by soldiers of the Assam Rifles from a house in the state capital, Imphal, this month and later found dead.

Junior home minister Shriprakash Jaiswal launched an inquiry into the claims, which the Assam Rifles deny.

The unit says the woman was part of the People's Liberation Army separatists.

Army co-operation

In an attempt to pacify local sentiment, Mr Jaiswal said those guilty of raping and killing the 30-year-old woman would be punished once the inquiry had been conducted.

He said that the introduction of the Armed Forces Special Powers Act - which gives powers to the military in Manipur - would be reviewed.

It would be decided by mid-August whether the act would be fully or partially withdrawn, he said.

Senior army commanders assured the minister they would cooperate with the inquiry into the woman's death.

However, protesters continued to defy a curfew, burning effigies and staging sit-in demonstrations in front of the Raj Bhavan, the residence of the Manipur governor in Imphal.

The protest began on 10 July when scores of women stripped in front of the cantonment at Kangla Fort with banners asking the army to rape them en masse.

Indian Prime Minister Manmohan Singh, on a visit to the neighbouring state of Assam, has expressed concern at the security situation in Manipur.

The Indian army has been fighting several separatist groups in the state.