However, official confirmation was awaited as the body has not yet been recovered.
A police party, which was part of the anti-militancy operation, was also fired upon from the crowd, the officer said.
Similar reports were also received from Heff village of Shopian district where at least ten militants appeared at the funeral of slain LeT militant Nasir Wani and offered 'gun salute.' "First, two militants appeared at the funeral which was attended by thousands of people".
Separate clashes in Indian-administered Kashmir killed 10 people - five police officers, a soldier, two civilians and two suspected rebels - authorities said on Friday, as violence in the troubled region continues to spike.
"When the encounter was on an unruly mob instigated by the militants started pelting stones with an intention to disturb the operation and give chance to holed up militants to escape". "He was also involved in the killing of an ASI and Constable near Bus stand Anantnag a year ago".
Police said the civilians were killed in the crossfire between militants and the government forces. The attack took place in Thajiwara area of Achabal, some six kilometers away from the police station.
In a barbaric act, the terrorists shot at the policemen with their assault rifles after overpowering them. Its spokesman Abdullah Ghaznavi told a news agency that they attacked the police party in Achabal in which six policemen were killed.
The youth was taken to district hospital Kulgam where doctors declared him dead on arrival.
The other civilian who died was 15-year-old Ahsan Mushtaq, who died by a bullet hit near the encounter site, according to PTI.
Lashkar has claimed responsibility for the attack, which is being seen as retaliation to a day-long encounter that killed Mattoo.