Two militants and an army jawan were killed and an officer injured when security forces tried to flush out militants holed up in a house in Jammu and Kashmir.

Two AK assault rifles, five magazines, ten hand grenades and a wireless set were recovered from the militants. The operation was called off after the troops searched the mosque and adjoining houses and found no other militant.

They had entered the house after escaping from a mosque in Pulwama district's Litter village, about 45km from Srinagar, when security forces launched an operation to rescue 60 civilians, including 40 women, trapped inside the mosque.

After being rescued, the latter were segregated and their identities established to prevent the militants from escaping in the guise of civilians.

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Deputy Chief Minister Mangat Ram Sharma had ruled out giving safe passage to the militants.

"The militants were firing at the troops from inside the mosque," said a senior police officer.

Army troops had cordoned off the mosque following specific information about the presence of militants, defence sources said in Srinagar.

Security forces had on Saturday morning sealed Litter and three other villages, including Sagoo-Handhama, from where police recovered the blood-soaked and mud-drenched bodies of IRCON engineer Sudhir Kumar Pundir and his brother, as part of a drive to nab those responsible for the gruesome double murder.

The other nearby villages sealed by a joint team of the Rashtriya Rifles and local police include Malnar and Hephkud.

All the four villages were under tight security cordon and no one was allowed to move out from there, the sources added.

It was not immediately known whether the deceased ultras were involved in the gruesome murder of the Pundir brothers.

This was the second incident within a fortnight when militants took shelter inside a mosque. On June 10, three ultras holed up inside a mosque were killed after a two-day operation at Bogund village in Kulgam area of Anantnag district. The mosque was damaged in the encounter.

The latest incident comes one day before India and Pakistan are to discuss nuclear confidence building measures in Delhi.