The encounter took place at Aribagh in Nowgam area on the outskirts of Srinagar, the official said.
The separatist camp have called for an 'Aazadi march' to district headquarters on Saturday as part of their protest schedule.
Union Home Minister Rajnath Singh is scheduled to arrive in Srinagar on a two-day visit later in the day, official sources said.
Most of these new recruits came from Pulwama, Shopian and Kulgam districts in South Kashmir, which had become the hub of tech-savvy, young militants.
Arms and ammunition and other incriminating material were recovered from the site of the encounter.
The attack comes in less than 24 hours when militants of banned Hizbul Mujahideen ambushed a BSF convoy at neighbouring Goriwan area at Bijbehara killing three of its personnel.
The army had to had to aim at the crowd when jawans claimed to have been fired upon from the other side.
Earlier, a youth injured during clashes last week succumbed at a hospital in Srinagar on Monday morning.
Sayar Ahmad Sheikh was hit by a tear smoke shell while Yawar Bhat, died in security forces' action after protesters indulged in stone pelting.
No major clash was reported on Thursday from anywhere in Kashmir.
Restrictions have been imposed in five police station areas of Srinagar, a police official said.
With terror groups misusing Aadhaar to camouflage the identity of their Pakistani cadres, the Jammu and Kashmir police will request the Unique Identification Authority of India (UIDAI) to strengthen safety features of the biometric ID, officials have said.
The victim was identified as Sanjay Sharma, a resident of the Achan area in the south Kashmir district, they said, adding that the incident took place at around 11 am.
Besides the national capital, polling for the sixth round of the marathon seven-phase elections will be held Saturday in 14 seats in Uttar Pradesh, all 10 seats of Haryana, eight seats each in Bihar and West Bengal, six seats in Odisha, four seats in Jharkhand and one seat in Jammu and Kashmir.
The sources said two other people, suspected to be overground workers for militants, have also been detained for questioning.
For the first time in nearly two years, tourism has been on the rise in Kashmir. But what does that mean for the average Kashmiri, ponders Abhishek Mande Bhot after a recent visit to the Valley.
Six policemen, including a sub-inspector, were killed at Achabal in Anantnag district of South Kashmir after terrorists ambushed a police party on Friday.
Security forces launched a cordon and search operation in Khiram in Srigufwara area of the south Kashmir district this morning after receiving specific intelligence input about the presence of militants in the area, a police official said.
Restrictions on assembly of four or more people were in force in rest of the Valley as a precautionary measure to maintain law and order.
'In times to come this will be considered a watershed event, but only if the establishment can see the flag which is up and the straws in the wind which are flying,' says Lieutenant General Syed Ata Hasnain (retd).
A terrorist was killed on Wednesday in an encounter with security forces in Anantnag district while another ultra was trapped in a cordon in Sopore area of north Kashmir, police said.
Kashmiris protest against the killing of Amarnath pilgrims.
One terrorist was also killed in the gunfight.
The two met during a training in Mussorie and it was love at first sight.
Earlier in 2010, the highest number of 156 terrorists were killed between January and July that year.
Clashes were reported from a number of places in Srinagar city and parts of Budgam district but nobody was hurt in these incidents, police said.
The annual Amarnath Yatra began on Thursday as a batch of about 2,750 pilgrims left the base camp in Nunwan, Jammu-Kashmir, for the cave shrine housing the naturally formed ice-lingam in the south Kashmir Himalayas.
Curfew-like restrictions were imposed on Saturday in parts of Kashmir, including Srinagar city, and Amarnath yatra suspended as authorities apprehended protests in the Valley, where tension prevailed following the killing of Hizbul Mujahideen commander Burhan Wani by security forces.
An official said the attack appears to be a reprisal for killing of several Lashkar terrorists.
From a trickle in 1990, when militancy erupted in the valley, the numbers have, however, gradually seen an upward trend.
Kashmir remained on the edge with six more persons, including a cop getting killed in violence on Sunday.
More than 8,000 pilgrims on Monday paid obeisance at the holy cave shrine.
Tahira, 44, sustained injuries during the encounter and was rushed to the district hospital, but she could not be saved.
Hundreds others were wounded many of whom received bullet and pellet injuries and are undergoing treatment in various hospitals.
As many as 160 terrorists were killed and 102 arrested in Jammu and Kashmir in 2019.
Here are some stunning pictures from snow-bound Kashmir.
The authorities had on Tuesday lifted curfew across Kashmir except from six police station areas of the city.
The PDP elected the 56 year old unanimously to succeed her father.
4 civilians were also killed and dozens of others injured in clashes that broke out between protestors and security forces following three separate encounters.
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