Militants have held seven people hostage in a house in Thuraun village near Shopian, south Kashmir.

In the morning security forces had surrounded the house, where the militants were hiding. The villagers were sent -- in groups of five and two -- to negotiate their surrender. But the militant instead took them hostage.

Senior police and administration officials have arrived at the spot and efforts are on to rescue the villagers and secure the surrender of the militants.

Jammu and Kashmir Finance Minister Muzaffar Baig has condemned the incident. "We are outraged with this kind of incident. My personal reaction is that of indignation. The incident needs to condemned by all those who stand for peace," he told rediff.com in Delhi.

Frustrated, terrorists are resorting to these sorts of acts to give vent to their anger. He welcomed the US government's decision to declare underworld don Dawood Ibrahim a terrorist.

With inputs from Onkar Singh in New Delhi