A siege laid by security personnel in Srinagar's Ahmadnagar area ended on Thursday morning after the militant, who was trapped inside a house, managed the escape in the dark.
The encounter, which lasted more than 8 hours, was started on the basis of specific intelligence inputs about the presence of a top Lashkar commander, Abu Hurara, in the area.
Though officially police confirmed the presence of only one militant, sources said there could have been more.
"The militant managed to escape under the cover darkness. Two of our men are also injured," said Srinagar SSP Ashiq Bhukari. According to sources, five policemen were injured during the operation.
According to police sources, the militant launched a counter-attack on security forces using heavy gunfire and grenades at around 2am and managed to give a slip to them and escaped under dense tree cover on the back side of the cordoned house.
Locals said police and CRPF cordoned off the area at around 6pm on Wednesday and started house-to-house searches. They zeroed in on a two-storey house in old Ahmednagar on the outskirts of the city, where militants were hiding in a room on the first floor.
Eyewitnesses say before security forces could act, militants lobbed grenades and fired at the raiding party.
All the injured police personnel received splinter injuries and were shifted to SKIMS hospital were condition of one constable is stated to be critical.
Sources say Abu Hurara is the operations chief of Lashkar-e-Toiba (LeT) in Srinagar and had recently moved into an adjacent area with his group after being injured in a fire-fight with security forces. Police had been keeping track of him and Wednesday's operation was based on days of surveillance and intelligence inputs.