Some 15 militants were in the Amteka market for about 20 minutes from 11:00 AM before heading back to their camps in the northern Himalayan foothill near the Indo-Bhutan border, locals and the traders said.
People in the market and traders fled at the sight of the militants, they said.
District Superintendent of Police Kumar Sanjit Krishna told PTI that after receiving information he rushed to the market with police, army and CRPF personnel and launched a search for the ultras.
The militants picked up the two youths at gun-point last night when they came looking for a man named Zakir Hussain and could not find him, police sources said.
They forced the two to lead them to Hussain's house, but when they raised the alarm, the militants fled.