Will a deadlocked transaction be rolled back automatically?

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SQL

SQL-Server

Hi,
I am using transactions to perform operations at the back end using Sqlserver 2005.
If deadlock error occurs(i.e) Error number is returned as 1205 will that deadlocked transaction be rolled back or that particular transaction will fail.

Begin Try
begin Transaction Save

Update Table1  -----Executed Process
Update Table2  -----Deadlocked Process

Commit Transaction Save
End Try

Begin Catch	

if(ERROR_NUMBER() <> 1205)
    RollBack Transaction

End Catch	

Here in the above transaction if Table1 gets updated successfully and Table2 is deadlocked then will both the update DML statements fails or the Second DML Statement fails.

I need a solution for this.
Helpers are appreciated...