However, another report quoting the villagers said that he was killed inside the vehicle and later the security forces took his corpse along.
The security forces had launched an anti-militancy operation in Kakapora area of Pulwama district following information about presence of militants there, police said.
Top Lashkar-e-Taiba commander Ayub Lelhari was on Wednesday gunned down by the security forces in an encounter that broke out between Army and terrorists in Jammu and Kashmir's Pulwama district.
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He was among the four security personnel injured in the attack on August 14. He said Lelhari was district commander of Lashkar.
In the encounter which lasted for approximately 24 hours in Shopian's Awneera village, the forces succeeded in eliminating Hizbul commander Yasin Yatoo alias Mehmood Ghaznavi.
Ayoub Lelhari, the Pulwama district commander of the LeT, was killed in a swift encounter at Bandarpora in Pulwama. "His killing is a major success and it has weakened the militant network in Pulwamam", the spokesman said.
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Local residents said the vehicle was intercepted and it led to a very brief encounter.
"Two policemen were injured in the initial firing after which an encounter started in which Lelhari was killed", police said. "The fire was returned by the troops and in the brief gunfight, the militant was killed", he said. He was one of the senior-most Hizbul militants active in Kashmir and was designated divisional commander after Burhan Wani was killed a year ago.
He was category "A" militant and carried a reward of Rs 10 lakh on his head, a police official said.
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"He was involved in number of offences including killing of civilians in Pulwama besides attack on security forces".