Militants opened fire on a search party of the security forces in Palhalan area of north Kashmir's Baramulla on Friday morning, triggering a gunfight. Two militants reportedly escaped from the site.
"The search party came under fire from the militants and there was an exchange of fire," said a police official.
The number of militants hiding in the area could not be ascertained.
The search operation was carried out jointly by a team of the Army's 29 Rashtriya Rifles, the police's Special Operation Group and 53 Battalion of the CRPF.