Story included in Fatal Encounter (4)
I believe the answer is:
tale
'story' is the definition.
(I know that story can be written as tale)
'included in fatal encounter' is the wordplay.
'included in' indicates the answer is hidden within the clue.
'TALE' can be found hidden inside 'fatal encounter'.
(Other definitions for tale that I've seen before include "An account of incidents or events" , "Old wives' recital?" , "Report" , "See 20" , "Yarn or story" .)