The encounter, which started yesterday, resumed on Wednesday in Pulwama's Awantipora.
Personnel of Jammu and Kashmir Police and security forces are present on the spot.
"#Awantipora update: #Encounter has #resumed. Police & security forces are on the job. Further details shall follow," Kashmir Zone Police tweeted.
On Tuesday, an Indian Army jawan and a Special Police Officer (SPO) of Jammu and Kashmir Police have lost their lives during the encounter.