The killed Indian Army troopers included one captain and two troopers of the elite force who were specially rushed to the area to flush out a group of "heavily armed and highly trained militants," according to police.

A senior police officer said that army troops have retrieved the bodies of the captain and the two troopers from inside a house who were killed in the initial assault on the holed up militants.

The daylong engagement began early this morning on a tip-off about presence of a group of militants inside two houses in the Chinkipora locality of the Sopore town.

As the security forces raided the two houses in which the militants were holed up, they came under heavy volume of fire and grenade attacks from the hiding militants with the army captain getting caught inside the house.

Sources said a senior officer of the army had offered the militants safe passage in exchange for the release of the officer, who the militants were claiming to be holding in captivity, which was turned down by the holed up militants.

Late Tuesday evening the Indian Army blasted the two houses to bring the standoff to an end.

However, deputy inspector general of police north Kashmir range, A. Q. Manhas confirmed that fresh firing exchanges had broken out between the militants and the surrounding security forces.

"The militants are now firing from an adjacent house after the two houses where they were hiding during day time were razed by the security forces," Manhas said.

He said the search of the debris of the two houses for bodies of the slain militants and arms they were carrying has been deferred to the daybreak Wednesday since the hiding militants are still firing at the security forces.