Security forces stormed a hotel in Indian-administered Kashmir killing two gunmen and ending a stand-off that lasted almost 24 hours, officials say.
The gunmen launched their grenade and gun attack in Srinagar on Wednesday killing a civilian and a policeman.
They subsequently entered a hotel in the city's Lal Chowk area and exchanged fire with security forces.
This is the first major militant attack in Srinagar in two years. Violence there has declined in recent years.
Officials said that one of the gunmen belonged to the banned Pakistan-based militant group Lashkar-e-Taiba.
But there has been no claim of responsibility for the attack so far.
The police chief of Jammu and Kashmir state Kuldeep Khoda told reporters that the "operation was over" with the killing of the two militants.
He said the security forces had killed the two gunmen - and that the second one was shot while trying to escape the hotel building after setting fire to it.
"We are trying to find out whether there are any more terrorists inside. We will be launching combing operations in the area soon," Mr Khoda said.
He said security forces had evacuated a number of people from the area since the stand-off began on Wednesday afternoon.
The attack took place in the city's historic Lal Chowk or Red Square area.
The BBC's Altaf Hussain in Srinagar says that there was a heavy exchange of fire between the security forces and the gunmen early on Thursday morning as the stand-off continued.
The security forces also rescued 10 people from a neighboring hotel in what is a crowded business district in the city, our correspondent says.
India and Pakistan declared a ceasefire in 2004, but suspended peace talks after the 2008 Mumbai (Bombay) attacks, which India blamed on Pakistan-based militants.
Separately, at least three Pakistani soldiers were killed and 11 injured in a suicide bombing outside an army barracks in Pakistani-administered Kashmir on Wednesday.
No group has claimed the attack near the town of Rawalakot. It follows a number of recent attacks on Shia Muslims and the security forces.
Source: British Broadcasting Corporation (BBC).
Link: http://news.bbc.co.uk/2/hi/south_asia/8444868.stm.
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