While two militants have been killed, according to reports, one is still hiding and the forces have started a search operation to locate the militant.
Media reports say that the encounter between terrorists and security forces got underway after the area was cordoned off and a search operation was started by the security forces on the basis of specific intelligence information about the presence of terrorists.
After the security forces personnel zeroed onto the spot where terrorists were hiding, they came under a heavy volume of fire that triggered the encounter.
"Encounter has started at Chingam area of Kulgam. Police and security forces are on the job," said a police officer in a report by IANS.
As this is a developing story further details are awaited.