The militants hiding inside a cave managed to flee the hilly area after a standoff that continued for several hours.
The operation begun on Tuesday evening within the Mangalore police station limits as the locals came to know about the presence of the militants.
Police official Izzat Shah said that the locals showed resistance to the militants hiding in the cave, which resulted in the death of a man, identified as Majdali.
Shah said, "When the local population found out that the militants were hiding in the area, they started fighting with them and later informed the police and security forces, which resulted in an operation."
He added that the personnel injured in the operation was shifted to Saidu Teaching Hospital for medical assistance.
A few months back, militants took two security officials, including a police officer, hostage in the Matta area of the district.
He was rescued with the help of the local jirga, and then an operation was carried out to deal with the miscreants.
Soon after, thousands of people of Swat took to the streets to protest against the incident, saying they would never allow Swat to become a centre of extremism again.
A wave of militancy swept Swat from 2007-10, which claimed thousands of lives and destroyed the city's infrastructure.
Back then, outlawed Tehreek-e-Taliban Pakistan (TTP) had established autonomous police stations and check posts, and imposed various restrictions on the commoners.
Peace returned to the valley as a result of a military operation, and the displaced people were able to return to their homes and live a normal life.
But for the past few months, there have been reports of attacks by militants at some places of Swat.