The gunfight started after the security forces received intelligence inputs about the presence of militants, following which they launched a search and cordon operation. Security forces have cordoned off the area. Internet services have also been suspended.
Earlier on Sunday, five militants were gunned down by security forces during an encounter in Kellam area of Devsar in south Kashmir's Kulgam district.
The house where militants were holed up was blasted. The forces had recovered weapons and warlike stores from the militants hideout, news agency ANI had reported.
More details are awaited.