One of the terrorists (1)/ of the Kashmir valley (2)/ are shot dead. (3)/ No error (4)

Answer

3

Explanation

was will replace are because
when a Plural Noun is placed with a real Singular Subject (one, each, etc.) with of, the Verb will be
Singular
Look at the examples given below: One of the boys is ill.
Each of the girls is clever. Hence, was shot dead is the right usage.