The police have also initiated action against the house owner where the terrorists were hiding.
Two terrorists - both Pakistani nationals - were killed during an encounter with the security forces in Srinagar on Sunday, said the police. Two policemen and a CRPF jawan were also injured in the encounter, it said.
The killed terrorists were involved in a recent attack on CRPF in Srinagar in which one CRPF personnel was killed and another was injured.
"Today's encounter in Srinagar is one of the best example of how an investigation of terror-crime, in which we lost one CRPF personnel on April 4 and led to anti-terror encounter. A big success to Srinagar Police," said Vijay Kumar, Inspector General of Police, Kashmir.
The police have also initiated action against the house owner where the terrorists were hiding.
"Legal action will be taken against the house owner where terrorists had taken shelter. The property will be seized as well," said Mr Kumar.
The encounter is also grim reminder of presence of foreign terrorists in the city.
Few months ago, the police had said that all the active terrorists in Srinagar have been killed.