Police believes that one or two militants were still hiding in the premises and they continued to fire.
There was firing tonight in which one policeman and an army jawan suffered minor injuries, police officials said, adding firing was going on.
Talking to reporters here after visiting Poonch, Director General of Police Rajendra Kumar said, "There might be a group of 4 to 6 involved in this incident. We have recovered two bodies of militants. Two more militants have been killed. We feel one or two militants are still alive".
"Militants infiltrating a day before Eid is clearly pointing towards the fact they had come here to disturb peace on Eid," he said.
The encounter started at around 7.30 AM yesterday with militants firing at a police party, killing one policeman. Then they took shelter in a house and another structure in the Mini Secretariat.
Security forces killed three militants yesterday and one today.