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"Members of the armed village defence committee retaliated and engaged the militants for about two hours in a gunbattle," an official told AFP.
A police official said another six people were wounded, four of them seriously.
No one has admitted carrying out the attack but police suspect militant groups, two of which - Hizbul Mujahideen and Lashkar-e-Taiba - are active in the area.
In another incident on Tuesday, four construction workers were killed in an attack on their camp in the Poonch district of Jammu and Kashmir, which borders Pakistan.
}Indian officials say expected a resurgence in separatist violence following the end of the two-month conflict along the line of control.
Artillery fire
![[ image: width=150]](/olmedia/395000/images/_398562_drasharvest150_ap.jpg)
On Tuesday, India said it fired on intruders in three areas near the Line of Control which had yet to be cleared of Pakistani backed forces.
"The eviction of Pakistani troops has been completed in all sectors except three places where Pakistani troops are still in our territory," a defence ministry statement said.
It said the Directors General of Military Operations of the two countries had communicated over the withdrawal of remaining forces from the Muskoh Valley, Drass and Batalik sections.
(Click here to see a map of the area)
Indian Army Chief General Ved Prakash Malik visited the frontline town of Kargil on Monday to be briefed on the latest situation.
General Malik said he was proud of his soldiers for their efforts and sacrifices during nearly 10 weeks of bitter fighting with Pakistani-backed forces.
But he warned that it would be impossible to fully monitor the entire length of the Line of Control even after all the forces had left.
It has been suggested that India could incur daily expenses of $2.3 million to keep a watch on the stretch.
Meanwhile, Indian Defence Minister George Fernandes has rejected accusations of human rights violations by the Indian army.
Reacting to reports by Human Rights Watch and Amnesty International, Mr Fernandes told the BBC's HARDtalk programme: "There have been no (summary) executions by the army. If there have been any such accusations, then those accusations with documentation should have been made available to the government."
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Kashmir border 'too long to defend'
(19 Jul 99 | South Asia)
Indian Army in Kashmir
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Sharif: I'm innocent
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