Two terrorists and their associate were killed in an encounter with the security forces at Hyderpora in Central Kashmir's Srinagar district, officials said on Tuesday.
The terrorist-associate was the owner of the house in which the terrorists were hiding.
"The house owner who was injured in terrorist fire, succumbed to his injuries...Search is still going on," the J&K Police tweeted quoting IGP Kashmir Vijay Kumar.
The police said the terrorists had been hiding on the top floor of the building. "As per source and digital evidence, he has been working as a terror associate," the police tweeted.
Earlier police on Monday said two terrorists were killed in a gunfight with the security forces.
The encounter took place after a joint team of the police and the army cordoned off the area and launched a search operation on the basis of specific information about the presence of terrorists.
As the security forces zeroed in on the spot where the terrorists were hiding they came under a heavy volume of fire that triggered the encounter.