The incident occurred at a heavily guarded security check post here near Gora Qabristan (Christian graveyard) on university road.
The attackers riding a motorcycle, opened indiscriminate firing on the security check-post on university road that was retaliated by the law enforcers, police said.
During the exchange of fire, two people including an attacker was killed and seven others who were inside a wagon at the check post got injured, they said.
The injured were shifted to a nearby hospital here. Police have started investigation into the incident.
Meanwhile, police arrested the commander of an outlawed organisation after crossfire in Matni area.
The suspect having a head money of Rs 5 lakhs was wanted in various activities of terrorism.