After the attack, Indian skipper Virat Kohli shared his condolences to the Bangladesh team and others who got affected by the incident.
This was the third attack on civilians in south Kashmir in the past two days.
Earlier in the day, Karachi police chief Amir Sheikh claimed that the attack on the Chinese Consulate was planned in the neighbouring Afghanistan.
A search for militants was underway.
The incident was reported from Pantha Chowk, on the outskirts of Srinagar, where a cordon and search operation has been launched.
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The suspects allegedly wanted to use bomb vests and assault rifles to do harm at the event, and planned to detonate a car bomb at another location, prosecutors said.
CRPF jawan shot dead at home by terrorist in Jammu & Kashmir's Pulwama
Two police personnel have lost their lives while three sustained injuries in the exchange of fire.
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While the SPO was killed on the spot, his wife, Fareeda, suffered injuries in the firing by the militants, the official said.
There was no loss of life or property in the attack. The forces have launched a search operation to trace the terrorists.
Five suspected terrorists had reportedly come to Arrah from West Bengal with an intention of carrying out a major attack. But, their plans were thwarted when the bomb exploded unplanned inside their room at a lodge near Harkhen Bazaar.
Earlier in the day, two terrorists, carrying bags and armed with AK47s, tried to approach the CRPF camp, but were forced to flee when senteries shot at them.
5 Army soldiers martyred, one civilian killed and 11 injured in JeM terrorist attack on army camp in Jammu so far. Army guns down third terrorist, ops continue.
The attack reportedly took place inside Sunjuwan Army camp area at around 4.55 am on Saturday after the terrorists barged into the camp.
Terrorists attacked a post manned by a joint team of Jammu and Kashmir Police and CRPF at around 11 pm on Thursday night. Heavy gunfight was reported from the area.
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