The Jammu and Kashmir police on Tuesday claimed to have busted a Lashkar-e-Tayiba module that allegedly had links with the four persons gunned down in Ahmedabad on June 15 and was planning an attack on the Bombay Stock Exchange.

"Police killed two foreign militants and arrested more than 20 people. The group was operating in the summer capital Srinagar for the past two years," Director General of Police Gopal Sharma told mediapersons in Srinagar.

The state police believe it had links with the four persons killed in an encounter in Ahmedabad on June 15.

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"One of the Pakistani militants, identified as Babbar, who was killed by the Ahmedabad police, was sent by the group from Srinagar to execute some operations in Mumbai and Ahmedabad," Sharma said.

The group was working under the command of the LeT's divisional commander for central Kashmir Shahid Ahmed and the outfit's Srinagar district commander Zahid Hafiz alias Naeem. Both were under arrest.

The duo was taken to Astanpora near Srinagar for recovering arms and other material in the wee hours of Tuesday morning when the police party, assisted by the Border Security Force and Central Reserve Police Force, came under fire. "The two militants got killed in the exchange of fire while trying to escape," he said.

"The group had strong links with the Hizbul Mujahideen and Al-Umar outfits and was involved in several killings, including that of deputy inspector general of police Mohammad Amin Bhat and that of Maulvi Mushtaq Ahmed, uncle of Hurriyat leader Mirwaiz Umer Farooq.

"It was planning some high profile actions in the capital city as well as Mumbai, Pune and Delhi. They were planning to assassinate important political leaders and some top police officials.

"They were planning to target VIPs with an explosive laden vehicle and a suicide attack on the Bombay Stock Exchange," he said.