SRINAGAR: An Army captain, two CRPF troopers and a civilian have been killed in a fierce, ongoing gun-battle near the saffron town of Pampore in Kashmir Valley.

The encounter broke out on late Saturday afternoon when two to five suspected militants opened fire on a convoy of CRPF on way from Jammu to Srinagar in Sempora locality on the national highway in south Kashmir.

During the retaliatory fire, police sources said the heavily armed suspects took refuge in the main building of Entrepreneur Development Institute in Sempora near Pampore, sparking panic as the staff was preparing to leave for the day when suspects entered the building.

A similar attack took place barely two months back in the same area on December 8 which was effectively thwarted by the troopers, resulting in the killing of two local militants.

Police sources said the fresh attack resulted in the killing of two CRPF head constables, one of them a driver, and injuries to 13 CRPF personnel, including a commandant-ranked officer, who were evacuated to a nearby hospital.

"The condition of two jawans remains critical," sources said.

A large column of Army, J&K Police's Special Operation Group and CRPF cordoned off the building and started evacuating nearly 100 employees of the institute. Police said a civilian, Abdul Gani Mir, was shot during evacuation who later succumbed to his injuries.

Sources said a special team of the Army led by Captain Pawan Kumar, 23, a resident of Jind district in Haryana, stormed the building during the night but the operation failed, resulting in his death.

" The team came under heavy fire as they tried to enter the building where the militants are holed up. Captain Kumar of the elite 10 Para was killed and the team had to retreat," the officer said.

He said the forces are trying to avoid collateral damage by not blasting the building. A brief lull in exchange of fire ended on Sunday afternoon as a heavy exchange between the two sides resumed.

The site chosen for the attack by the suspects carries significance since the institute was set up in 2006 to encourage educated youths of Kashmir Valley to start their own entrepreneurial ventures which have met with little success.

In the last one year, a new generation of young, educated boys, belonging to well-off families, mostly in south Kashmir districts, have taken to arms with more than 80 youths joining militant groups including Hizbul Mujahideen and Lashkar-e-Toiba.