By Subir Bhaumik BBC correspondent in Calcutta

The army displays captured weapons

They say they also recovered a large number of arms, including an anti-aircraft gun, in raids on two rebel hideouts in the area.

Indian officials, however, say that many more rebels have managed to evade the police and the army.

They said the rebels entered Assam from Bhutan, after apparently surviving a Bhutanese military offensive last year.

'Evaded capture'

Thursday's exchange with the rebels, said to be from Ulfa, took place in Assam's Dhubri district, bordering Bangladesh.

Two makeshift rebel hideouts in the same area were raided and more than 30 weapons including an anti-aircraft gun and six rocket launchers were recovered.

But a senior military intelligence official told the BBC that they believed the rest of the rebels had evaded the security forces and made their way into Bangladesh.

Dhaka has always denied that Indian rebels have a presence on its territory

Indian military intelligence officials told the BBC that a group of more than 100 Ulfa rebels slipped into Assam from southern Bhutan last week.

They said the rebels had evaded the Bhutanese military offensive in December and taken refuge in the Manas jungle that straddles Assam and Bhutan.

In December, Bhutanese troops attacked several bases used by anti-Indian rebels in their kingdom.