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The sources said the grenade was aimed at a security vehicle parked outside the boundary wall of the high court near the busy Jehangir Chowk in the heart of the city.
None was injured in the explosion, they said.
Police and paramilitary forces deployed in the high security area immediately laid a cordon and launched a hunt to nab the militants involved in the attack, they said.
No militant outfit has owned the responsibility for the attack so far.
Elsewhere in the state, six militants and a civilian were among seven people killed in two encounters, they said.
In an anti-militant operation, the sources said security forces shot dead four Hizbul Mujahideen militants in a major gunfight at Bahak-Dadikuchan in Anantnag district.
The encounter broke out when ultras, who were in hiding, fired at a joint party of troops of the Rashtriya Rifles, BSF and local police who had laid a cordon around the area to flush them out.
An army search party also gunned down two militants in an encounter at village Kapran in Anantnag, they said adding a civilian was also killed in the shootout.
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