Jammu and Kashmir's Kupwara district, officials said on Thursday.
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The encounter began on Wednesday after security forces launched a cordon and search operation in Margi area of Lolab in the north Kashmir district based on specific intelligence inputs about the presence of terrorists, they said.
They said the operation was successfully concluded, resulting in the killing of a terrorist.
An AK rifle, two hand grenades, and four AK rifle magazines, were recovered from the site of the encounter, the officials added.