The army targeted the rebels in Khyber valley when they were moving towards Afghan border.
"Security forces ambushed the moving group at Wurmagai and Spurkot, killing 32 terrorists in exchange of fire," army said in a statement, adding three security personnel were also injured.
The army intensified operations in the region after Tuesday's terrorist attack on Army Public School in Peshawar that left 132 children and 16 staff members dead.
The security forces have killed hundreds of militants in the region but they are still far from defeated.
The militants hide in the mountainous porous border and frequently cross towards Afghanistan to escape army operation.
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