"Alert troops noticed movement of heavily armed militants close to the Line of Control in Keran Sector of Kupwara at around 3.00 AM. The militants were challenged, triggering a gun battle," a defence spokesman said.
He said two infiltrators were killed in the exchange of fire between the two sides.
"The operation was in progress when last reports were received," he said.
Infiltration attempts from across the LoC have been on the rise since the beginning of July and so far over 16 militants have been eliminated in operations along the ceasefire line in the past six weeks.