The information of the fourth terrorist being killed was given by Rajouri Deputy Commissioner Shahid Iqbal Choudhary on his Twitter handle.
The terrorists had infiltrated from across the LoC four-five days back in Rajouri sector and were traced to be in its Sunderbani tehsil after days of combing operations, the police said.
Amid the ongoing encounter between the security forces and the terrorists, the authorities refuted reports of a terror attack at a CRPF camp, but ordered closure of all educational institutions in the tehsil as a precautionary measure.
"An encounter has broken out between Nowshera-Sunderbani belt after a group of infiltrators were intercepted by the security forces today," J&K Director General of Police S P Vaid told news agency PTI.
He refuted reports of a terror attack by the terrorists terming them as "totally false."
Giving further details, Rajouri SSP Yougal Manhas said three bags of ammunition and explosives were recovered from outside a CRPF camp in Sunderbani.
As per the reports, a security guard manning the gate of a CRPF camp at Sodra in Sunderbani area fired some warning shots and raised an alarm after he detected some suspicious movement near the paramilitary camp.
The police and security forces had been conducting search and combing operation to track down the suspected infiltrators for four to five days in Sunderbani.
Denying reports of an attack on the CRPF camp, CRPF PRO Ashish Kumar Jha said there was such attack on the paramilitary force camp in Sunderbani.
He said the alert troops had detected some suspicious movement and had fired some warning shots.
Shahid Iqbal Choudary ordered the closure of all the educational institutions in Sunderbani sector in wake of the search operation.
The schools shall remain closed in the Sunderbani division today as a precautionary measure, he said.
Last night, two terrorists had entered into the house of one Bushan Kumar Sharma in Bunpori-Yoginallah area in Sunderbani and had forced them to prepare food, which they had taken away along with themselves, the reports said.