Security forces following specific information about the presence of militants in Aarigam (Nowgam) village in the outskirts of Srinagar city launched a cordon and search operation on Thursday.
Security forces have launched an operation to track down Ismail.
"As the security forces tightened the cordon, the hiding militants opened fire at the surrounding security forces triggering an encounter.
Two foreign militants, both Pakistan nationals, were killed in this encounter, including Abu Ismail, the top LeT commander, who planned and carried out the attack on a bus of Amarnath Yatris in Anantnag district on July 10 this year, police said.
Abu Ismail was a Pakistani national. He reportedly replaced Abu Dujana as the LeT chief after he was killed in Pulwama encounter in August.
The killing of Abu Ismail is seen as a major success by the security forces in their continuing anti-militancy operations.
In a rare attack on the Amarnath Yatra, terrorists killed seven pilgrims and injured 14 others, including policemen, when they struck at a bus carrying them in Jammu and Kashmir’s Anantang district in July.
The bus was attacked in Batengoo around while returning from Baltal to Mir Bazar after darshan.
(With inputs from IANS)