Sharma (41), who led Friday's daring encounter at Jamia Nagar where five terrorists linked with the recent serial blasts in the country were holed up, had received three bullet injuries on his abdomen, thighs and right arm.

The inspector, who was bleeding profusely, was rushed to the nearby Holy Family hospital where he was operated upon and later put on life support systems.

After battling with his injuries for nearly eight hours, he was declared dead at 7 pm in the evening.

"We have lost our best man," Joint Commissioner of Police (Special Cell) Karnal Singh said.

Sharma, who is survived by his wife and two young children, had won seven gallantry medals including a President's medal in 2008.

He joined Delhi Police as a sub-inspector in 1989 and was instrumental in the killing of 35 terrorists and the arrest of another 80 militants, police sources claimed, adding he had killed 40 inter-state gangsters and arrested another 129.

Home Minister Shivraj Patil said the example set by Sharma was ‘very rare’ to be seen.

"I have asked the Police Commissioner (Y S Dadwal) to do whatever is needed to help the family of this brave officer," Patil said after visiting the hospital.

He said the Home Ministry will offer all support to the officer's family.

Delhi encounter: 2 militants wanted in blasts killed

In a brush with terror in the capital for a second time in a week, two militants of the 'Indian Mujahideen' allegedly involved in the serial blasts in Delhi and other places including Ahmedabad, were killed in a fierce gunbattle that also left an Inspector seriously wounded in Jamia Nagar in South Delhi on Friday.

One of the two killed was identified as Atif, a prominent operative of the Indian Mujahideen who is believed to have played a ‘key role’ in the blasts in Delhi as well as in Ahmedabad, Jaipur and Bangalore, Delhi Police Commissioner Y S Dadwal said on the shootout that lasted about an hour.

Atif's accomplice Sajid, also a member of the Indian Mujahideen which is a shadow outfit of the banned SIMI and Lashkar-e-Toiba (LeT), was also killed while police nabbed Mohammed Saif who was injured in the gunbattle in 'Batla House', a four-storied building.

The militants fired eight rounds during the gunbattle while police retaliated with 22 rounds, Dadwal said adding police also recovered an AK-47 assault rifle along with two 0.30 pistols and a computer from the L-18 residence where the militants were staying for the past two months.

Atif is said to be a close associate of Mohammed Usman Qureshi alias Tauqeer, the elusive mastermind behind the serial bomb blasts in various parts of the country in the recent past and had travelled to Ahmedabad on July 24, two days before the serial blasts in that city, Dadwal said.