Officials identified the terrorist killed as Zia Mustafa, a Pakistani national who was arrested in 2003 as the mastermind of the Nadimarg massacre in Pulwama district in South Kashmir in which 24 Kashmiri Pandits were killed.

The three injured were taken to the nearest medical facility. Sources said their injuries are not severe, and that there has been no further exchange of fire with the militants.

Mustafa was taken by J&K police to the encounter site in Mendhar from the high-security Kot Bhalwal Jail in Jammu on Saturday to track the group that has been evading a massive combing operation in the Bhata Durian forests.

The operation was launched 14 days ago after five Army personnel were killed by militants in Chamrel, a forested area in the heights overlooking the Bhimber Gali-Suranakote-Poonch National Highway. Three days later, four more Army personnel were killed in Bhata Durian, which falls in another part of the same forest.

Army sources said it was not clear if the militants involved in these two incidents were from that group but a senior police officer said they were acting in tandem and had changed locations.

On Sunday, police said initially that Musfafa was seriously injured as security forces came under fire from the militants, and that he could not be rescued. Hours later, they said Mustafa’s body was retrieved from the site in a subsequent operation.

Police sources told The Indian Express that Mustafa was deployed because he knew the location of the hideout as he had been in touch with the militants despite being in the jail.

Mustafa was brought to Kot Bhalwal about two months ago from Udhampur where he was found to have allegedly using a SIM card to remain in contact with militants.

An official at Kot Bhalwal jail told The Indian Express: “However, after he was shifted here, we too started receiving inputs about him being in contact with militants active outside. We searched him and the entire jail premises but found nothing. For the past nearly a fortnight, we had shifted him to solitary confinement and deployed guards on rotation to keep an eye on him 24×7.’’

The prison official said Mustafa was handed over to Mendhar police on transit remand Friday following an order by the Principal District and Sessions Judge in Shopian. A police team from Mendhar had come to take his custody saying that he was wanted for questioning in a case, the official said.

Sources said there have been several instances in the past of jailed militants using mobile phones from inside Kot Bhalwal jail with searches yielding SIM cards.

Sunday was the first time in over a week that security forces had exchanged fire with the militants holed up in Poonch. They had traded fire in Chamrel on October 12 and in Bhata Durian on October 16.

The police, meanwhile, have so far detained eight people, including a 45-year-old woman and her son, on suspicion of providing logistical support to the militants.

During August-September, security forces were involved in three encounters in the Rajouri area. On August 6, two militants were killed in the Pangai forest of Thanamandi. On August 19, two soldiers, including a JCO, were killed in the same area. And on September 13, one militant was killed at Manjakote in Rajouri. Police sources believe that all these encounters were part of a chain of events.