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A fierce exchange of fire began on Wednesday morning in south Kashmir's Dadsara village near Tral, 40 km from Sringar, between holed-up militants and the security forces.
A senior police officer said troops of the Rashtriya Rifles and the police jointly surrounded a house in the Dadsara village early on Wednesday morning on a specific input about presence of militants inside it.
"As the security forces challenged the holed up militants to surrender, they opened fire triggering an encounter," the officer said.
Security forces have also surrounded a forest near Tral and search is on.
Sounds of gunshots were heard after the security forces cordoned the forest area near Largam village, the police said.