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The victims, who were reportedly working as porters with the Army, were approaching the alpha gate of an Army camp in the district around 6.15 am when they were fired upon, they said.
The officials said Shalinder Kumar and Kamal Kishore, both residents of Rajouri, died in the firing, while another person was injured.
The cause of the firing is not yet known, they said, adding that the situation in the area is tense and some agitated people pelted stones at the camp.
Reinforcements have been rushed in and further details are awaited, the officials said.