The incident took place at Nongalbibra market at around 5 pm yesterday when the police truck was dropping security personnel who were on patrolling duty. Militants hiding in a nearby forest opened fire indiscriminately, police said.
In the encounter, two civilians died on the spot while six of those injured were rushed to the district civil hospital where one of them succumbed to his injuries, police said.
One of those who died was a village defence party member and another was a driver, police said. The third victim has not been identified yet.
South Garo hill police chief D N Marak said additional forces have been rushed to the area.
Meghalaya's SWAT commandos and the CRPF's CoBRA commandos had been pressed into an operation to flush out the militants from the area.
Police said the Garo National Liberation Army (GNLA) whose chairman was under arrest, was behind the daring attack on the security patrolling party.
The GNLA, which has been involved in kidnapping, extortion and killing of both civilians and security forces in the five Garo Hills districts, was declared a banned organisation by the Centre in January this year.