As security forces zeroed in on their target, the holed up ultras fired at them, police said.
Security force personnel retaliated triggering a gunbattle that lasted four hours.
Two militants were killed in the gunfight, police said adding the identity and group affiliation of the slain ultras were not yet known.
A group of youths pelted stones at police as the dead militants were believed to be locals.
Pitched battles between protesters and police were also reported from some places in Kakapora area.