Police said the encounter was still continuing. 

The identity of the two killed terrorists was being ascertained, said the officials. 

The gunfight between the terrorists and security forces took place on Friday morning after a joint team of the police and the Army cordoned off the area and launched a search operation on the basis of specific information about the presence of terrorists. 

As the security forces zeroed in on the spot where terrorists were hiding they came under a heavy volume of fire that triggered the encounter.