Two militants were believed to have been killed in an encounter with security forces in Tral area of South Kashmir's Pulwama district on Saturday.
A senior police officer said the bodies of the militants were yet to be recovered and that the exchange of fire continued.
The encounter began after militants opened fire on security forces who were carrying out a search operation in Satoora forest area of Tral, 36 kms from Srinagar.
The police officer said the search operation was launched on information about the presence of some militants there.
The operation was jointly launched by the army, police and CRPF, reports NDTV.
The encounter is still underway.
On July 9, militants hurled a grenade inside a security forces' camp in Tral's Aribal town in which a CRPF jawan was imjured, reports The Times of India.