Two militants entered the Srinagar transport yard where the two buses purchased by the Jammu and Kashmir State Road Transport Corporation to ferry passengers to Muzaffarabad are parked.

The yard is next to the Tourist Reception centre, where the 29 passengers scheduled to leave for Muzaffarabad are housed.

The inaugural Srinagar-Muzaffarabad bus is to be flagged off by Prime Minister Manmohan Singh on Thursday.

A woman was injured in the firing.

Security forces are involved in efforts to neutralise the terrorists.