The terrorist was shot dead after he opened fire while trying to escape.
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Authorities ordered closure of schools and other educational institutions as a precautionary measure.
The encounter started when security forces launched a joint operation in Posta-Potra village in Gundana area, 26 km from Doda town, following information about presence of some terrorists, the officials said.
All 26 Indian crew on board the Indian ship were safe.
The man fired eight rounds in the presence of police personnel.
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