Four militants are believed to be hiding.
The encounter started early morning in Parray Mohalla of Hajin area in north Kashmir's Bandipora district. Director General of Police S.P. Vaid was quoted by PTI saying that the security forces have achieved a "major success" by gunning down the four militants. In the initial shootout, five jawans and four policemen were injured. Meanwhile, 4 army personnel have also been injured.
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Security forces launched a cordon and search operation in Hajin area of the district after receiving intelligence about the presence of terrorists in the area.
The Army also opened fire leading to an encounter, which is ongoing.
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The operation was on when reports last came in.
Two soldiers had succumbed to injuries before they could be evacuated for treatment, the official said adding three jawans were airlifted to Army's 92 base hospital here and their condition was stated to be stable.
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After the 10-hour long gunbattle between the security forces and terrorists on Sunday, mass protests gained momentum in South Kashmir's Kulgam district.