An assistant sub inspector and a militant were among three killed on Wednesday afternoon when militants hurled a hand grenade and opened heavy fire near the main bus stand in the border town of Poonch in Jammu region. Fourteen persons, including some security personnel, were injured.

Two militants, in combat dress, were heading towards an army camp in Poonch town around 1325 IST. On seeing some policemen approaching them, they lobbed a grenade, killing the police officer, and took refuge in a nearby building.

Some innocent people are believed to be trapped inside.

An encounter followed and additional troops were called to flush out the terrorists from the building.

The Senior Superintendent of Police, Poonch and senior police officers have rushed to the area to supervise the operation, sources said adding rescuing the trapped people will be the top priority.