Jammu and Kashmir Police chief Shesh Pal Vaid identified the slain militants as LeT district Pulwama commander Waseem Ahmad Shah and Nisar Ahmad Mir, both locals.
As the joint team was zeroing on the target house, the holed up militants opened fire, resulting in a gun fight that ended with killing of both the militants.
Jammu and Kashmir Police had been tracking the movements of Shah, who is considered as the "don" of Heff, another stronghold of militants in South Kashmir's Shopian district. "He had joined militant ranks in March 2014 and used to recruit new cadres into LeT", he said. "He was involved in number of FIRs viz 19/2014, 37/2014, 47/2014, 27/2015, 17/2016, 45/2016 30/2017, 02/2017, 50/2017 of P/S Zainapora and 107/2014, 130/2014, 87/2015 of P/S Shopian", the police spokesman said.
Revealing details about the operation, IG Khan said, "Of the two terrorists, Wasim Shah alias Usman was very notorious and wanted in connection with several terror-related cases".
The police claimed that Shah was the main architect of 2016 unrest in south Kashmir and carried a cash reward of Rs 1 million on his head.
Shah, 23, otherwise called "Abu Osama Bhai", was massacred at Litter in Pulwama, a place thought to be a place of refuge for aggressors.
The latest encounter comes just five days after a top commander of Jaish-e-Mohammed, Umer Khalid, a Pakistani national was killed in an encounter with security forces in north Kashmir's Sopore area.
According to local Kashmiri media, the protesters raised high-pitched anti-India and pro-freedom slogans. The forces responded by firing tear gas shells.