Militants riding a motorcycle lobbed grenades at a police van that was on a routine patrol near Rashkai on the Peshawar-Islamabad highway this morning.
One policeman was killed instantly, officials said.
Despite being injured, three other policemen in the van retaliated and killed two militants.
AK-47 assault rifles, pistols and grenades were found in the possession of the dead militants.
District police chief Mohammad Hussain told the media that the militants had fired at the van after lobbing grenades at it. He said police were conducting a search operation in the area.