"The encounter at Ahmadnagar locality of Buchpora ended with the killing of both the militants holed up in a residential house," a police officer said.
He said bodies of both the militants were recovered along with a cache of arms and ammunition from the encounter spot.
A police spokesman identified the slain militants as Abu Huzaifa and Chota Hafiz.
The gunbattle started last evening when police, assisted by security forces, launched a search operation following specific information about presence of militants in the house in the locality.
After a night-long lull, the encounter resumed this morning after the ultras let go the house owner Abdul Majid Rangrez and his wife, he said.
