Acting on specific information about the presence of terrorists in Rangreth near the old airfield here, the security forces launched a cordon and search operation in the area, a police official said.
While the forces were conducting searches in the area, the terrorists opened fire at them. The forces retaliated, and an encounter ensued, he said.
In the exchange of fire, a terrorist was killed. He was identified as HM commander Saifullah, who was wanted by security agencies in several cases of terrorist attacks, the official said.
Another terrorist was arrested from the spot, he said.
Incriminating material, including arms and ammunition, was recovered from the encounter site, he said.