"Two Lashkar-e-Taiba militants are believed hiding in the area", said the police.
There were no bodies of militants to be found in the hideout.
Police officials said that after the civilians were killed in the cross fire, the operation had to be called off for a brief time, to allow police and CRPF to disperse the mob that had gathered across the river. "As room intervention is not possible, so the house may be blasted soon", a police official told ET. Three among them, including two teenagers, succumbed to the injuries on being brought to the hospital.
A new generation of Kashmiri rebels, especially in the southern parts of the disputed region, has revived the militancy and challenged New Delhi's rule with guns and effective use of social media. As per latest report, some militants are cornered in the South Kashmir area.
Sources said the stone-pelting, which helped terrorists flee, was so intense that security forces had to retreat. Four men were killed and at least 40 civilians injured, officials said.
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"The slain Armyman was identified as Sepoy S Gunakar Roy". Rao, who is survived by his parents, had joined the Army in 2012, a defence spokesman here said.
This was strongly contested by locals who assert that the civilians were shot dead by the security forces determined to break up the street protests. The statement was silent on the death of the fourth civilian. "They have been sent to Srinagar for specialized treatment", the police officer said.
Authorities ordered closure of all schools and colleges in Kulgam and Internet services have been suspended in south Kashmir.
Meanwhile, separatists under the banner of Joint Resistance Leadership (JRL) have called for a general strike tomorrow against the civilian deaths.
One jawan and three civilians have lost their lives in the encounter till now.