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The well-build hideout was unearthed during a cordon and search operation by a joint party of police, Army and CRPF at Sagrawat forest in the Darhal area of the border district, the officials said.
A police spokesman said the underground hideout was covered with soil for camouflage.
He said the search of the hideout led to the recovery of four cooking gas cylinders, six empty AK rifle magazines, one pistol magazine with 13 bullets, one INSAS rifle magazine with 19 rounds, one communication set, one solar light with plate, one pair of hand gloves and wheat flour.
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However, officials said no one was arrested during the ongoing operation as the terrorists using the hideout managed to escape before the start of the search operation.
They said security forces also busted a cave-type hideout in the Balotha area of Basantgarh in Udhampur district during an ongoing anti-terrorist operation.
Some food items were recovered from the abandoned hideout, the officials said.
The search operation in Basantgarh was intensified on Monday after terrorists opened fire on a joint patrol party of CRPF and police, killing an inspector-rank officer of the paramilitary force.