Of course Kashmir is safe. I have a talked to so many people who were sad about the fact people think Kashmir is not safe. Only some places are sensitive, but again these are not tourist places.
Hey Ashu, It is safe. The places in Kashmir which are open to tourists are completely safe. 5 Days budget itinerary of Kashmir : Day0: Arrive in Jammu and take a sharing jeep to Srinagar ( 10 hours- Rs 500). Or you can take a cab to Banihal ( Rs400 ) then from Banihal take a train to Srinagar ( 1.5 hours- Rs20) Day1: Local sightseeing of Srinagar - Dal Lake, Shalimar Bagh, Nishat Bagh, Betaab Valley and old Srinagar city. The distance of gardens is 15km from the main city Day2 : Srinagar-> Sonmarg-> Srinagar. Spend at least one night at Shikara houseboat in Dal lake of Srinagar Day3: Sringar-> Gulmarg ( 3hours - 56KM).Visit Tangmarg town on the way to Gulmarg. Do activities like Gondola cable car, Ski and horse ride in Gulmarg Day4: Gulmarg-> Pahalgam ( 5 hours - 150KM). Visit Saffron fields of Pampora, Awantipura ruins and Bijbehara village on the way to Pahalgam. Spend the night at Pahalgam Day5: Pahalgam to Srinagar Pack winter clothes like jackets, woollen socks, woollen cap, gloves, moisturizer, first aid kit etc. Happy travelling!!!!!!!!!