Security forces engaged militants in a gun battle in Rafiabad area of northern Jammu and Kashmir on Wednesday, officials said.
Two militants are believed to be holed up in a house at Ladura in Rafiabad. Personnel from the Rashtriya Rifles and Special Operations Group of police exchanged fire with the militants.
Reports suggested the gun battle erupted soon after police received information about the presence of two local militants, including Imitayaz Kandoo of Sopore, a close aide of Qayoom Najar, the disbanded Hizbul Mujahideen militant.
Sources said foreign militants too might be present in the area.
According to police, Kandoo was involved in some killings in Sopore and carries a bounty of Rs 10 lakh on his head.
In recent weeks, Jammu and Kashmir has witnessed a spike in militant violence that coincided with a downturn in ties between India and Pakistan. Planned talks between the national security advisers of the two countries recently collapsed amidst diplomatic acrimony.
Pakistan-backed militants have carried out several attacks in recent weeks. Last week, three militants were killed in gun battles. Two Pakistani militants were recently captured alive in Jammu and Kashmir.