Two LeT terrorists, who had escaped from a recent encounter and were tasked to carry out some sensational terror incident in Budgam ahead of forthcoming Republic Day, were killed in an encounter in the district on Tuesday, officials said.

Police said acting on specific input regarding movement of terrorists, a joint police and army checkpost was set up near the Court crossing in Budgam.

"During area domination, the joint party signalled a suspected vehicle bearing registration number JK04B-6771 to stop, however, the terrorists onboard jumped out from the vehicle and started firing indiscriminately on the joint party which was retaliated effectively, leading to an encounter," police said.

During the brief shoot-out, two terrorists linked with the proscribed terrorist outfit LeT were neutralised and have been identified as Arbaaz Ahmad Mir, resident of Putrigam Rajpora and Shahid Ahmad Sheikh, resident of Kisrigam Kakapora.

"As per police records, both the killed terrorists were categorised terrorists and part of groups involved in several terror crime cases. It is pertinent to mention that both the terrorists escaped earlier from the recent encounter in Budgam. They were tasked to carry out some sensational terror incident in Budgam district ahead of forthcoming Republic Day," police said.

Arms and ammunition including an AK-47 rifle, and a pistol were recovered from the site of encounter.

A case under has been registered and investigation has been initiated.