A group of militants are believed to be trapped in South Kashmir's Pulwama district as an encounter broke out on Tuesday evening.
Security forces have cordoned off a village in Batapora area, 30 km from Srinagar, in an operation that was started late in the evening.
Preliminary reports suggest that holed up militants opened fire at the search party, triggering an encounter.
Two to three militants are believed to have engaged the security forces in the gun battle.
Reports of exchange of fire were trickling in when reports last came in.