The attack took place in Kellam village, where terrorists targeted the two workers before fleeing the scene.
One dead, another battling for life
According to media reports, one of the victims, identified as Deepak, a resident of Chhattisgarh, died on the spot.
The injured worker, Bhupender, also from Chhattisgarh, was rushed to a nearby hospital, where his condition is reported to be critical.
Security forces immediately reached the area after the attack.
Massive search operation launched
Following the incident, security agencies launched a large-scale cordon and search operation in and around Kellam village to trace the attackers.
Additional forces have been deployed, and the area has been sealed as efforts continue to hunt down the terrorists.
Second targeted attack in 10 days
The Kulgam attack marks the second targeted terrorist strike in Jammu and Kashmir within the last 10 days.
Last week, a police personnel was killed in a targeted attack in Anantnag, triggering an extensive security crackdown across the Valley.
In the aftermath of that attack, police detained more than 3,000 suspects as part of an intensified counterterrorism operation.
Omar Abdullah cautions against mass detentions
Reacting to the large-scale detentions following the Anantnag attack, Jammu and Kashmir Chief Minister Omar Abdullah had cautioned that indiscriminate arrests could prove counterproductive and potentially aggravate the security situation.
Attack amid Amarnath Yatra
The latest attack comes while the annual Amarnath Yatra is underway under an unprecedented security cover.
In addition to the existing security grid across Jammu and Kashmir, around 670 additional companies of paramilitary forces have been deployed to ensure the safety of pilgrims and maintain law and order during the pilgrimage.
Security agencies are investigating the Kulgam attack, and further details are awaited.