At least two hiding militants engaged a search party of the security forces in a gunfight in Srinagar's Wagoora area on Tuesday night.
A police spokesman said the encounter broke out at Wagoora, Nowgam area of Srinagar. "Two terrorists are trapped. The security forces are on the job," the spokesman said.
The operation is being carried out by the personnel of the police and the CRPF.
The militants were apparently hiding in a residential area when they were encircled during a search operation, launched after a tip-off.
"A contact was established with the militants, who opened fire," an official said.
There are no reports of any casualties. The police could not immediately identify the trapped militants and their affiliation.