The bodies of the two militants were recovered from the debris of the house at Arwani in Bijbehara area this morning after security forces blew up the building using explosives, a police official said.
He said one of the bodies was severely burnt.
However, an army official said they were still sifting through the debris and a final statement on the incident will be issued once the operation was called off.
One army jawan was injured in the gunfight that began in the early hours yesterday.
A 24-year-old youth died allegedly after being wounded by a "stray bullet" near the site of encounter.
Arif Shah, a resident of Sangam area of Anantnag district, was hit when security forces were dealing with a group which was indulging in stone-pelting near the encounter site, the official said.
(REOPENS DEL19)
Meanwhile, another youth died near the encounter site in Padgampora during the gunbattle between the militants and security forces.
Jalaluddin (22) was rushed to a hospital in an unconscious state from Padgampora but was declared brought dead at the hospital, a police official said.
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