No other casualties were reported, but the incident underscored fears that militants are preparing attacks in other areas as retaliation for an army offensive under way in the Afghan border region of South Waziristan.
The Pakistani military said that 14 militants and six soldiers were killed over the last 24 hours as part of that operation.
The three men in Kashmir fled after police acting on a tip raided their hide-out in the Thori area of regional capital Muzaffarabad, according to senior police officer Sardar Ilyas.
Police pursued them and the men detonated explosives on their bodies after being trapped on a mountain, Ilyas said, adding 18 hand grenades, three assault rifles and a pistol had been seized from the hide-out.
Potential targets
Security was tightened around government buildings and other potential targets in the city amid fears of violence, Ilyas said.
Kashmir is disputed between Pakistan and India, who both claim the territory in its entirety. The two nuclear rivals have fought two wars over the region since gaining independence from British in 1947.
Pakistan expressed fear that an increase of US troops in Afghanistan could push militants across the border into its territory and called on the Americans to factor in that concern as part of their new war strategy.
The Pakistani concerns, raised by the prime minister during a meeting with visiting CIA director Leon Panetta, could pose another headache for President Barack Obama as he weighs military proposals to send 10,000 to 40,000 additional troops to Afghanistan next year.
Prime Minister Yousuf Raza Gilani said the US must fully share its plans for Afghanistan with Pakistan so that it can contribute to them, according to a statement from his office.
The US Embassy declined to comment on the CIA director's visit to the country. American security and government leaders have frequently visited Pakistan in recent weeks to urge it to do more against militants on its side of the border blamed for violence inside Afghanistan.
Pakistani officials have said in the past that they were worried that Obama's original surge of 21,000 troops this summer would lead to more militants crossing over into the country, something that has not happened.
US plans to close remote posts near the border and focus on larger population centres in Afghanistan have sparked fears that militants will now find it easier to move between the two countries.
Peshawar (AP) A gas explosion injured one person and damaged a two-storey building in northwestern Pakistan near the Afghan border yesterday. Police initially said it was a bomb but later determined it was an accident.
The conflicting statements reflect the atmosphere of fear that has taken hold in Peshawar, the largest city in the northwest and the main gateway to the Al Qaida and Taliban-infested frontier region. The area has been increasingly targeted as militants retaliate against an army offensive aimed at routing Taliban militants from a nearby region.
Peshawar has been hit by eight militant attacks in less than two weeks, including a suicide bombing that killed 19 people on Thursday, as militants retaliate against an army offensive that began in mid-October against the Taliban in South Waziristan. Many militants are believed to have fled north to escape the fighting.
Senior officers, including the city's police chief, first said the explosion, which partially destroyed the two-storey building, was caused by a bomb.
But Haroon Babar, a senior police officer, said a bomb disposal squad sent to the site found no explosives.
"It seems that a gas pipeline under the wall might have exploded causing the damage," he said.
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