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A senior police officer said army and police had jointly surrounded Chattibandi area of the Bandipore district on Tuesday evening on specific information about the presence of terrorists there.
"As the security forces were laying the cordon, hiding terrorists opened fire at them injuring an army captain and a trooper. The injured were evacuated to hospital for treatment," the officer said.
More reinforcements have been rushed to the encounter site to strengthen the cordon as it is raining heavily in the area, according to latest reports.