"There was an intelligence information that a white Maruti 800, and a blue Honda City have been stolen and may be used for terrorist activities," said a senior army official on the condition of anonymity.
The army official described the incident as "unfortunate" and added that the whole incident happened within a span of "few minutes" and the soldiers reacted to the situation.
Youths identified as Faisal Yusuf Bhat and Mehrajuddin Dar were killed, while two others - Shaker Bhat and Zahid Naqash - were injured Monday when the soldiers opened fire on their speeding car at Chattergam village in Badgam district.
"There were three pickets, over a distance of nearly two kilometres. Because of the intelligence tip-off, soldiers signalled the car to stop but the car jumped the first picket, increased the speed and passed the second picket as well," the army official said.
He added that the first two pickets had no barriers except the guarding army personnel and at the third picket some stones were placed.
"When the car arrived at the third picket, the youths tried to squirt around the stone barrier. Soldiers also said they heard sounds that appeared like bullet firing, reacting to which they fired," said the official.
"The whole incident, when the youths sped through the pickets and the soldiers reacted, took around five minutes," the official said, adding that the army is very sad about the incident.
While a board of inquiry will probe the actual series of events, army sources said as per initial information, the youths sped past the pickets put in place by the army, which increased doubt.
With high security alert in view of Muharram, upcoming assembly elections, as well as the recent blast at Wagah border, the army had set up mobile vehicle check posts.
"The security was beefed up in view of Muharram, upcoming elections and after that the blasts at Wagah border, personnel were on high alert. It may have been reaction to the situation, but the board of inquiry will probe if they used extra force," said the official.
He added that putting the picket in place in an area sensitive from security point of view is not wrong.
"The board will probe if they warned the citizens, which they said they did ask them to stop, and if minimum force was used," the official said.
Another official said one version of the story is that the car had hit a truck somewhere on route and the youths were trying to speed off to escape.
The official added that the sound of firing that soldiers heard may have come as the car tried to squirt around the picket, or it may have come from soldiers firing from the second picket.
All 11 army personnel involved in the operation have been identified and shifted to the location where a court of inquiry is being conducted.