A brief gunfight broke out between government forces and militants in Kanelwan village of Bijbehara in Anantnag district late on Thursday evening.
A police official said army's 3 Rashtriya Rifles and special operations group (SOG) of J&K police launched a search operation in Kanelwan after "inputs" about presence of two to three militants there.
"As the searches were on, militants resorted to indiscriminate firing to break the cordon and escape," a police official said.
He said the fire was retaliated to. "After the initial firefight, there was no firing from the militants' side. However, it is not clear whether the militants have escaped or not," he said.
The official said forces have tightened the cordon and are zeroing in on a few houses were the militants might be hiding.
"We are even carrying door-to-door searches," he said, adding all roads have been sealed.
A source said the area is surrounded by thick forests and militants might have escaped.
Meanwhile, as soon as the word about militants being trapped spread, people took to streets and clashed with forces to disrupt the cordon and search operation.