Two Army men had lost their life in the gunfight yesterday, while three others were injured.
"Fresh firing has erupted at the encounter site at Zainapora in Shopian," a police official said.
He said as the forces were conducting search at the encounter site after killing three militants, fresh firing started from the debris.
The operation is still on, the official said.
Three militants were killed this morning in the encounter which began yesterday.
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"Three militants have been killed in the encounter at Zainapora in Shopian," Director General of Police (DGP), S P Vaid told PTI earlier.
Security forces launched a cordon and search operation following information about presence of militants in Avneera village of Zainapora area of the district yesterday.
As the forces were conducting searches, the militants opened firing on them which was retaliated by the law enforcement personnel, triggering a gunfight.
Five soldiers were injured in the gunfight yesterday and were evacuated to 92 Base Hospital of the Army for treatment.
Two soldiers among them succumbed to injuries last night.
A defence spokesman identified the Army men as Sepoy Ilayaraja P, a resident of Tamil Nadu, and Sepoy Gawai Sumedh Waman, a resident of Maharashtra.