Earlier, the third militant was believed to be Adil Malik.
Itoo, also spelt as Yatoo, was a resident of Chadoora area of Badgam district.
Yatoo was one of the longest serving militants in the Valley. The commanders are Bashir Lashkari, Junaid Mattu, Abu Dujana and now Yaseen Itoo. Three AK-47 rifles were recovered from their possession.
A Srinagar based police spokesman said Umer Majeed was involved in a grenade attack on security forces at Yaripora and many firing incidents including Yaripora and Kanjikullah.
"One of the terrorists killed today morning at Shopian is identified as Yasin Itoo; operational commander of Hizbul Mujahideen". In a solemn ceremony at BB Cantt, Lt Gen JS Sandhu, Chinar Corps Commander and all ranks, paid homage to the martyrs, as did representatives and officials from the state government and other security agencies.
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Another protester with pellet injuries to his eyes was referred by doctors to a hospital in Srinagar. He was among the three militants gunned down by the Kashmir police.
Five army soldiers were injured in the gunfight. The sacrifice of Yasin Itoo and his two associates will be remembered for times to come because they stood the ground and allowed his associates to escape safely thus setting a great example of bravery and leading by example he said and added that "it is an irreparable loss". One of the injured is an officer in the Indian Army.
The operation began after security forces received inputs that terrorists are present in Awneera village of Zainapora area of the district.
Meanwhile, two J&K policemen Mukhtar Ahmed and Muhammad Ashraf and an Army jawan Raj Kumar were injured when the militants opened fire at a joint search party when it entered Wahab, Parray Mohalla in Hajin area of northern Bandipore district on Sunday, officials said.