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Eight boys, who were being taken for imparting training in subversive activities, were rescued by security forces, an official spokesman said.
Militants gunned down Chaloo, a NC block president and close associate of Works Minister A M Sagar, in downtown Srinagar around noon on Wednesday, the spokesman said.
Chaloo was rushed to a hospital where he was declared brought dead, he said.
In another incident, three Hizbul Mujahideen militants were killed in a gun battle with security forces at Dharsa in Udhampur district, he said.
Meanwhile, two ultras were killed in another gun fight in Badrikote-Waripora in Baramulla district, the spokesman said.
Two assault rifles and a letter pad of the Hizbul Momineen, a militant outfit, were recovered from their possession, he said.
Another militant was killed in a gun battle with security forces at Ranipora-Mattan in Anantnag district, the spokesman said.
Two houses and a shop were damaged in the exchange of fire, he added.
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