The killing triggered more protests in the town and had an echo in Srinagar and Pulwama districts of Kashmir as well.
Trouble started with protests by locals in Handwara over alleged molestation of the girl student.
According to the allegations, she was molested by soldiers posted in an army picket in the town, official sources said.
The protestors pelted stones at the army picket after which the soldiers opened fire, resulting in the killing of Iqbal Ahmad and Nayeem Bhat, the sources said.
More From This Section
A police official said the army personnel fled from the bunker soon after the death of two civilians.
The protestors then set ablaze the static army bunker in main chowk Handwara and attacked the police station by pelting stones, the police official said.
"The protestors, whose numbers swelled after the news of death of two youth, set ablaze the bunker. They also pelted a barrage of stones on the local police station," the official said, adding police fired teargas shells to chase away the protestors.
Additional police personnel have been deployed in sensitive areas of the city to maintain law and order.
Political parties, like National Conference and Congress, expressed grief and shock over deaths and demanded that a probe so that the guilty could be punished.
Separatist outfit Hurriyat Conference headed by hardline leader Syed Ali Shah Geelani gave a call for shutdown tomorrow.