Sheikh died in a brief gunbattle with government forces in Buchroo village of the district last night.
Defying curfew-like restrictions, thousands of people from Qaimoh and adjoing villages marched towards the family home of Sheikh to take part in his funeral prayers.
The mourners, shouting slogans for freedom, carried the body of Sheikh in a huge procession to the local graveyard where he was laid to rest.
The funeral prayers of the deceased were offered in three shifts due to a huge rush of people.
Meanwhile, clashes broke out in Khudwani area of Kulgam against the killing of Sheikh.
Youth pelted stones on the police and paramilitary forces who responded with teargas shells, witnesses said.