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Security forces launched a cordon and search operation in the Danmar area, falling along Safakadal-Soura road, in the early hours of Friday following information about the presence of terrorists, a police official said.
He said the search operation turned into an encounter after terrorists opened fire towards security forces positions which were retaliated.
Two terrorists were killed in the ensuing gunfight, the official said, adding the identity and group affiliation of the slain militants was being ascertained.