The terrorist was identified as Sajjad alias Abu Ubadullah, 22, a resident of Muzaffargarh district of Balochistan, Pakistan, a senior police official told IANS.
Sajjad was caught a little over three weeks after Pakistani terrorist Naveed was arrested on August 5 following a terror attack on BSF troopers on the Jammu-Srinagar highway. Naveed had taken three people hostage who overpowered him.
It was not immediately known how Sajjad was caught.
Three separatist guerrillas were killed by the security forces on Thursday.
"The gunbattle is still going on," a senior police officer said.
The militants managed to break the cordon after being challenged by the army, triggering a gunfight on Wednesday on the Indian side of the Line of Control (LoC) that divides Kashmir between India and Pakistan.