Niaz was wanted in connection with a number of attacks in the region that killed more than two dozen citizens and security officials. There was a $40,000 bounty on his head.
The security forces had launched a cordon-and-search operation in a forest area of Choor Ki Gali in Herpora of Shopian, following information about the presence of militants there.
In the firing, Constable Rameez Raja was injured and rushed to SMHS hospital in the city where doctors declared him brought dead.
Acting on specific inputs, security forces arrested the LeT militant associates in a joint operation at Laloo Sheshgari Hyderpora.
The attack wounded 20 people, including four church guards, and broke windows at the church and nearby buildings in Makassar, the capital of South Sulawesi province.
IGP Kashmir, Vijay Kumar said the encounter in Wangam area of South Kashmir's Shopian, which began on Saturday evening, was over with the killing of two militants belonging to HM and LeT.
The IGP identified the arrested over ground workers as Javaid Sheikh and Muzaffar Mir.
The militants opened fire on the CRPF personnel in Lawaypora in the Parimpora police station area in Jammu and Kashmir, a police official said.
The rest five convicts are on the run and were tried in absentia and defended by state-appointed lawyers in line with the law.
Security forces launched a cordon and search operation in Manihal area following information about presence of militants there and a gun battle broker out when militants opened fire.
According to the Shopian Police, a joint cordon and search operation was launched on Saturday night by the police, 34 Rashtriya Rifles and 14 Battalion of CRPF in the said area.
A security official said Srinagar always remains a target because any attack here gets wide publicity.
Askash Mehra, 22, son of Krishna Dhaba owner Ramesh Kumar Mehra succumbed to injuries at SMHS hospital in the early hours today, doctors said.
The rebels, belonging to five groups that were active mostly in the hill district of Karbi Anglong, declared a unilateral ceasefire with the government earlier.
The official said as per the police records, they were involved in providing shelter, logistics and other support to the active militants in the area.