One policeman was killed and six people injured as a fierce gunbattle raged between terrorists holed up inside a hotel and security forces in Budshah Chowk in Srinagar on Wednesday.
Of the six injured, two are security personnel and the rest civilians.
Police moved swiftly to evacuate shoppers and shopkeepers to safety as gunfire continued between the guerrillas holed up inside the Standard Hotel in Budshah Chowk, adjacent to Lal Chowk- the busy shopping and commercial district of the Jammu and Kashmir summer capital- and the paramilitary Central Reserve Police Force (CRPF) troops.
The militants had hurled grenades and fired from automatic weapons at the CRPF guards outside the Akhara building, which is being used as a barrack by the CRPF, triggering retaliatory attacks.
A caller of the Al Mansoorian militant outfit called up a local news agency to claim responsibility for the attack. According to the caller, around three men of the outfit were hiding in the hotel.
However, a senior police official said that there were two fidayeen guerrillas inside the hotel.
"A raiding party of the CRPF and police entered the first floor of the hotel and searched some rooms. We have to move cautiously as the area is heavily congested," said the official.
"We have so far rescued more than 200 persons safely. There are still people trapped inside shops and some homes there. Efforts are continuing to rescue them," he told from near the Standard Hotel building.
Tension is high in the summer capital as anxious parents thronged schools to fetch their children back before the usual closing hour. Some anxious relatives of the shopkeepers, who are trapped inside, were waiting and enquiring from police officials about their welfare.
Announcements were being made on loud speakers by the police, asking shopkeepers and others in the area to move out of the buildings and leave the area in waiting bullet-proof vehicles.
Heavy police and paramilitary reinforcements have been moved to the area and the city centre has been sealed.
Among the four civilians is Nazir Ahmed, the manager of the hotel, police said.