Acting on specific information about the presence of militants in Drugmulla village of Kupwara, a joint team of police and army cordoned-off the area, an army official said.
He said as the security forces were conducting a search operation, the holed-up militants fired upon them.
The security forces retaliated, triggering an encounter, the official said.
Intermittent firing was going on when last reports came in, he said.
PTI