The minister informed the Jammu and Kashmir Assembly that Subedar Maganlal and Subedar Mohammed Ashraf were killed in the attack by a group of militants.
While the minister did not specify the group affiliation of the militants who launched the attack, officials said Jaish-e-Mohammed militants were behind the terror strike.
DGP S P Vaid said the terrorists entered from the rear side of Sunjwan Army camp where family quarters are located.
IGP SD Singh Jamwal told reporters here that "around 4:55 am suspicious movement was noticed by the sentry and his bunker was fired upon. The fire was retaliated. The number of militants isn't known. They've been cornered in one of the family quarters."
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Security forces and police have cordoned off the area around the Sunjwan Army camp.The camp falls under the first Jammu and Kashmir Light Infantry in 36 Brigade.
Soon after the attack, reinforcements of the Armys special forces and SOG rushed to the spot and cordoned off the whole area amid a fierce gunfight, security official said.
A high alert has been sounded in Jammu and security beefed up in and around the city.
Intelligence inputs had warned of an attack on the Army or security establishment by Jaish-e-Mohammed in view of the death anniversary of Afzal Guru who was hanged on February 9, 2013.