Following a tip-off, a house was raided when the militants opened fire at the police forces and two militants were killed in the ensuing encounter, police said.
Three other militants escaped from the spot.
Two 9 mm pistols with some ammunition were recovered from the spot, they said, adding that the bodies have been sent to Regional Institute of Medical Sciences Hospital in Imphal for post-mortem.
The identities of the militants were not yet known, police said.
In a separate incident, Army troops caught an armed cadre of ZUF and seized arms from him, defence officials said in Kolkata.
Based on specific information about the presence of a militant in Dolang of Tamenglong district, troops of Red Shield Division launched a swift operation in the midnight of Sunday, resulting in apprehension of the militant, Defence PRO Lt Col Ajay Kumar Sharma said.
He said the militant has been identified as self-styled major (under secretary finance) Fungneilu Sekho Chiru alias Aloor aged 39 years.
One 7.62 mm pistol with magazine alongwith four live rounds, 200 gm of TNT and one mobile phone was recovered from his possession.
The militant alongwith recoveries have been handed over to the local police station, the officer said.
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