A soldier and a militant were killed on Wednesday following a gun battle near the Line of Control (LoC) in Machil sector in Jammu and Kashmir.
Military sources told IANS that the soldier was one of the two who were critically injured on Tuesday.
One terrorist had so far been killed in the operation against militants in Kupwara district.
Five soldiers were injured on Tuesday when Rashtriya Rifles challenged a group of heavily armed militants near the LoC.
The soldiers were flown to an army hospital in Srinagar where doctors described the condition of two as critical.
One of them succumbed to his injuries.
The sources said the militants had infiltrated into the Indian side of Jammu and Kashmir when they were challenged by the troops.
The winding LoC is the de facto border between India and Pakistan in divided Jammu and Kashmir.