The encounter took place at Malbagh, a locality near Hazratbal shrine, when security forces, acting on an intelligence input, started a cordon and search operation, they said.
A huge cache of incriminating material and explosive substances, including gelatin sticks, explosives, detonators, arms, explosive body vests, batteries and nitric acid, were recovered following searches based on their disclosures.
Police said militants attacked a patrol party of the CRPF with a powerful grenade at Habak road crossing on the strategic Srinagar Leh highway.
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