The fire broke out at Hotel Neelam near the city’s main bus stand.
The injured, including a woman, were taken to the Government Medical College Hospital for specialised treatment.
Doctors said two of the injured were in a critical condition and battling for life.
Around a dozen fire tenders fought the blaze and brought it under control before it could spread to other buildings.
District administration officials reached the spot immediately to supervise the rescue and relief operation.
Condoling the deaths, Chief Minister Omar Abdullah said on his Twitter account that he has ordered an investigation into the blaze.
Witnesses told reporters the fire started from the ground floor of the hotel where some vehicle tyres were stored by the owner who also runs a transport business.