The Khyber Pakhtunkhwa Counter-Terrorism Department and the provincial police conducted a joint operation, and gunned a down a suspected terrorist and another arrested.
The CTD additional inspector general said in a statement that both the terrorists belonged to a banned organization.
He claimed the terrorists were involved in the target killing of the Sikh community and ulema in Peshawar.
The terrorists have killed four ulema, three Sikhs, two Christians and one member of the Shia community since March.
The CTD addl IG said the slain terrorist belonged to Afghanistan.
The arrested terrorist was located after pointation from the mobile phone of his slain associate, the officer claimed.