A gunfight broke out between militants and security forces in Heff Khuri village in Zainapora area of south Kashmir's Shopian district on Tuesday.
A police official said that on a specific information about the presence of militants, army's 44 RR, special operation group (SOG) of police and CRPF launched a cordon and search operation late evening.
"As the forces zeroed in towards the house the militants had taken shelter, the hiding militants opened fire. The fire was retaliated, triggering an encounter," he said.
A police official said a fierce exchange of fire is on.
"Lights have been installed at the spot to prevent the militants from escaping," he said.