An exchange of fire broke out between the police and suspected Maoists in the Ganapuram forest area in Gundala mandal late on Monday night.
According to information reaching here, two suspected Maoists are believed to have been killed in the encounter. One constable was also reportedly injured.
A police team exchanged fire with a group of Maoists during the course of combing. The exchange of fire continued till reports last came in, the sources added.
Police officials rushed to the Gundala forest area to monitor the situation.