A militant of Hizb-ul-Mujahideen died in a gunfight with forces in Buchroo village of this South Kashmir district on Sunday evening, police said.
The slain militant has been identified as Dawood Ahmad Sheikh of Kaimoh town of Kulgam district.
A police official said on specific input about presence of militants in the area, the Army's 1 Rashtriya Rifles laid a cordon around the Buchroo village.
"At around 7 pm, the search party was fired upon by the militants and the fire was retaliated," a police official said. He however said "after few initial gunshots, there was no firing from the militant side."
"After some time, a body of one militant was recovered," he said.
A soldier was also injured in the gunfight, reports said.
The police official said there are reports of one more militant being holed up inside a house in the village.
"More contingents of Police, CRPF and Army have been reached the area and the cordon has been tightened," he said. "As of now, no firing is going on from either side."
Superintendent of Police (SP), Kulgam, Mumtaz Ahmad confirmed the killing of Dawood.
"Dawood was a most-wanted militant who has been active since 2013," he said.
The SP claimed that Dawood was "involved in killings of retired DSP, Bashir Ahmad of Ashmuji, Territorial Army man Gowhar Ahmad Matoo in Khudwani area of Kaimoh, Sarpanch and also involved in attacks on security forces."
Dawood, according to police sources, was a listed as category A+++ militant.
Earlier, eyewitnesses said as the cordon was on, villagers came out to help the militants escape.
"The forces resorted to aerial firing and teargas shelling to disperse the protesters," they said.
As the news of Dawood's death spread in his native area Kaimoh, youth held anti-India and pro-freedom demonstrations, reports said.