"One of the terrorists killed in the IBO was identified as Asmatullah alias Hafiz while identification of the second terrorist was in progress," read the statement issued by the military's media wing.

It added that the search operation was conducted on the reported presence of terrorists.

A huge cache of weapons and ammunition -- including submachine guns, hand grenades and a large number of multiple calibre rounds -- were also recovered from the terrorists' possession, they said.

The official handout added that the "terrorists were involved in terrorist activities against security forces, target killing and kidnapping for ransom."