Security forces on Wednesday surrounded a telephone exchange in Badamibagh Cantonment area, Srinagar, where a suicide squad of Al Mansooriyan was holed up.
Police sources told rediff.com that the militants hurled a grenade from the second floor of the building, resulting in injuries to four armymen.
All the 15 people trapped inside the building had been rescued.
The militants had attacked the Central Reserve Police Force's 62nd Battalion headquarters on Tuesday. One CRPF soldier was killed and three were wounded in that attack. The militants later entered the exchange building.