According to the police, they had set up a check point at Khirram in Anantnag, 50 km from here, last night following information about movement of militants in the area.
They said the cab in which the militants where travelling was signalled to stop but the driver tried to flee from the spot. The policemen then opened fire in which the driver and one of the militants were injured.
The injured persons have been identified as Mohammad Yousuf Lone, a LeT militant, and driver of the vehicle Nissar Ahmad Laway.
The duo and another militant -- Abdul Hamid Bhat alias Zulfikar -- were arrested while another ultra Sajad Ahmad Bhat alias Gowhar managed to escape, the police said.
Two pistols, two hand grenades and some ammunition were recovered from the possession of the arrested militants, they said.