Srinagar: Guerrillas believed to be foreigners sneaked into an Army camp in Jammu and Kashmir on Thursday and killed three soldiers in an audacious pre-dawn attack that left two militants dead, officials said.

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Seven other soldiers were injured in the fighting that erupted after the insurgents at 4.30 a.m. cut through the two-layered barbed wire of the firing range at the Panzgam army camp in Kupwara district, some 120 km north of Srinagar.

Taking advantage of the surprise element, the attackers hurled grenades and fired indiscriminately, causing the casualties. Two of the soldiers in hospital were said to be in critical condition.

The army retaliated, killing two militants. A third reportedly escaped, triggering a massive search operation.

In no time, crowds gathered outside the army camp shouting slogans and resorted to heavy stone throwing, the officials said. The army opened fire killing a 70-year-old civilian.

"The mob resorted to heavy stone throwing demanding the bodies of the slain militants," an officer said.

"The fidayeen terrorists attacked the Panzgam army camp close to the LoC (Line of Control)", which divides Jammu and Kashmir between India and Pakistan, Defence Ministry spokesman Colonel Rajesh Kalia told IANS.

According to officials, the identify of the terrorists was being ascertained.

The dead soldiers included Captain Ayush Yadav from Kanpur, Subedar Bhoop Singh from Rajasthan and Naik B.V. Ramanna from Visakhapatnam.

The injured were flown to Srinagar for treatment.

Panzgam is the rear administrative area for over nine army units in Kupwara district and is spread over an area of 240,000 sq metres. The camp is about 20 km from Kupwara town and some 10 km from the LoC.

The attackers were engaged by a Quick Reaction Team (QRT).

Army sources said the attackers wearing black Pathan suits and combat jackets were foreigners, but their nationality has not been established yet. They had no backpacks with them, said army officials, indicating that it was not a case of fresh infiltration, and the terrorists had been on the Indian side for a while.

Three AK-47 assault rifles, nine magazines, 156 rounds of AK-47, a Chinese pistol, a pistol magazine, three grenades, three matrix sheets, two GPS devices, a smartphone and a radio set were recovered from the suicide attackers.

Defence Minister Arun Jaitley condoled the deaths.A

"My thoughts and prayers are with the families of the three martyred soldiers. Prayers for speedy recovery of the injured. The indomitable courage of our forces in safeguarding the country is exemplary. Salute to martyrs for their supreme sacrifice," Jaitley tweeted.