While there was no official word on the identity of the deceased, locals who had brought him to the hospital said his name was Firdous Ahmad, a police official said.
"One person with fire arm injuries was brought dead at Pulwama district hospital," the official said.
At least six other persons were injured in security forces' action against violent protestors near the encounter site.
The official said that over 100 "miscreants" started pelting stones at security forces involved in the anti- militancy operation in Hakripora area of Pulwama.
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As the security forces were retreating from the encounter site, some youth started pelting stones at them near district hospital Pulwama.
The security forces responded by opening fire, resulting in injuries to two persons including a nurse working inside the hospital, the official said.
He said two other persons were brought to the hospital in an injured condition but it was not clear where they suffered the injuries.
Reports of protests have been received from several parts of south Kashmir and from some parts of the city as well.
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