Two Border Security Force troopers and two civilian were injured when terrorists targeted a stationary BSF vehicle with a hand grenade in the high security area of Lal Chowk in Srinagar on Tuesday afternoon.
The police said militants had flung a grenade which exploded inside the vehicle injuring two troopers sitting inside.
"Two civilians were also injured in the explosion. The injured have been taken to hospital for treatment," a senior police officer said. The condition of the two BSF troopers is critical.
Tuesday's explosion, the first in the city's central area this year, triggered panic in the bustling Lal Chowk with people running for cover.
Some shopkeepers abandoned shops and ran for security.
No group has yet claimed responsibility for the blast, which was executed when the security forces were engaged in an encounter with terrorists hiding in the upper reaches of Khrew near saffron-rich Pampore in south Kashmir.
Reports said one militant was killed and a trooper was wounded so far in the continuing gunfight, which started on Tuesday morning.
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