The terrorist identified as Kasim Khan, who had escaped from the encounter site and taken three persons hostage in a school building in a nearby hamlet, was arrested after an operation was launched by the army and the police, defence sources said.
All the hostages have been freed and the operation has ended, Deputy Commission, Udhampur, Shahid Iqbal Chaudhary said.
He offered condolences to the families of the jawans identified as constables Rocky and Shubhendu Roy who died in the attack even as he spoke to BSF Chief D K Pathak about the incident.
The militant strike was the first in Udhampur district in over a decade coming days after terrorists attacked Dinanagar Police Station in Gurdaspur in Punjab.
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The militants hurled grenades and opened indiscriminate fire on the convoy when it reached Nassu belt on its way from Jammu to Srinagar, IG Jammu, Danish Rana said, adding that the BSF jawans retaliated, killing one of the two militants.
The injured jawans have been taken to a hospital, he said, adding a massive combing operations has been launched by the army and the police in and around the area which has been cordoned off. Vehicular movement on the highway has been stopped due to the incident.
The government and the security forces were doing their best to tackle such evil designs and "without a doubt the country's respect, honour and the people's security is the government's topmost priority," he said in Delhi.
Congratulating the security forces for killing one militant and nabbing the second terrorist alive, senior Congress leader Ghulam Nabi Azad said, "Catching a terrorist alive is a huge achievement. Due to this, in the coming time we will get to know about the future attacks which Pakistan has planned.