CRPF spokesperson Rajesh Yadav said the bodies of two terrorists have also been recovered while one more is believed to have been killed.
"Four CRPF jawans have been martyred and three others are injured. The bodies of two terrorists have also been recovered. We believe another terrorist has also been killed," Yadav told PTI.
He said intermittent firing is still going on and one terrorist is believed to be holed up in building block.
Yadav told PTI the terrorists fired indiscriminately injuring three CRPF personnel.
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One of the injured personnel was identified as Saifuddin, a resident of Nowgam here, officials said.
Director General of Police S P Vaid said security forces had inputs about an impending militant strike in the Kashmir Valley for the past three days.
Terming the attack as "unfortunate", Vaid said as long as Pakistan keeps sending militants, security forces and people of Kashmir will continue to go through this.
The CRPF camp also serves as training centre for troops inducted for counter-militancy operations in Kashmir Valley.
A Jammu and Kashmir Police team is also co-located with CRPF in this camp.