This encounter came into wake just after joint team security forces killed the top leader of LeT in Ladoora area of North Kashmir.
In September 2016, over 19 Indian soldiers were killed in an attack on the Uri army base.
The Jammu and Kashmir Police on Wednesday said that one of the two Lashkar-e-Taiba (LeT) terrorists killed in the Bandipora encounter was involved in several other terror attacks in the area.
A senior police official said that two militants were also killed in the shootout.
The two squads of Garud personnel, comprising one officer and 13 commandos each, had joined the Srinagar-based Chinar Corps in August for a six month-long "live situation training", the sources said.
Director General of Jammu and Kashmir Police SP Vaid had said it was a major breakthrough for the security forces as the militant was involved in many attacks on security camps in North Kashmir as well as targetting policemen in particular.
One pistol, a huge quantity of ammunition and two AK-series rifles were recovered from the encounter site.
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The Garud commandos were seriously injured in the firing with the terrorists.
Hailing the soldiers, Vaid said in an ensuing tweet, "Salute to officers &a Jawans of SF & J&K Police".
"As the forces were closing in, the militants fired upon them around 5 am, resulting in injuries to many army personnel". Sources said that two militants also made an appearance at the funeral.
Nasrullah Mir, a local resident, was killed along with his associate in a brief gunfight with forces on Wednesday morning in Rakh-i-Paribal area of the town.
As per the reports, the Khalid was killed in the joint operation by the Jammu and Kashmir Police's Special Operation Group, CRPF and Army.
The area saw intense clashes between surging crowds and the security forces after the killing of militants.