Five CRPF personnel and two militants were killed in an overnight encounter inside a camp of the para-military force on the banks of Srinagar's famous Dal Lake.

Two members of the al-Mansoorian outfit on Tuesday night barged into the camp, housed in a hotel, Inspector General of Police K Rajendra Kumar told PTI on Wednesday.

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The nearly seven hour-long encounter inside the hotel located on a small island ended early on Wednesday morning after the CRPF stormed the building.

"The operation has ended. We killed the two militants who attacked the hotel," said Inspector General S S Rawat. "Five CRPF troopers, including one officer, died while two others were injured and are undergoing treatment in the hospital."

The dead include one CRPF sub-inspector, a head constable and three constables.

The encounter began at around 2040 IST on Tuesday night when two heavily armed militants attacked a company headquarters of the Central Reserve Police Force located on a small isle on Dal Lake with grenades and assault rifles.

They shot dead two CRPF personnel, including a sub-inspector, and stormed the building. While a sentry manning a bunker outside the hotel gunned one of them down, the other barged into the camp firing indiscriminately at the soldiers inside killing two of them. He killed another soldier before taking cover in a bathroom.

Within minutes, CRPF personnel surrounded the hotel building and took up positions in houseboats around the hotel.

Early on Wednesday morning, they stormed the building, blasted the wall of the bathroom and gunned down the militant. "We later searched the hotel building and adjoining houseboats," said a police officer.

Staying in tastefully decorated houseboats moored on the Dal Lake is a popular attraction for tourists visiting Kashmir.