At least one person died and several others were injuries when the terrorists opened indiscriminate fire. Initial reports claimed that it was a suicide attack.
Militants opened fire near the four-storey Silver Star hotel near Lasjan on Pantha chowk-Parimpora bypass road on the outskirts of the city around 4:20 pm.
The deceased has been identified as Farooq Ahmad. However, it was not immediately clear whether the hotel or a security forces convoy passing through the area was the target of the militants, police said.
Security forces have cordoned off the area and launched a hunt to track down the militants, the police said.