The militants targeted the camp of 3/1 Gorkha Rifles from the rear at around 6.15 am, firing indiscriminately in which a civilian was killed and a soldier was injured.
The troops reacted swiftly, preventing the attackers from penetrating any deep into the camp even though a few vehicles caught fire after the initial assault by the militants.
The deceased civilian was working as a generator operator inside the camp.
"In an alert and swift response to a terrorist strike, the Army today killed three terrorists in Tangdhar, thus foiling an attempted suicide attack," he said here.
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An army official said the troops surrounded the militants by 7.30 am and by 10.30 am all the three were killed.
Senior Superintendent of Police (Kupwara) Ijaz Ahmad said the three militants had entered the camp.
Three AK rifles, ammunition, Under Barrel Grenade Launchers and a number of grenades were recovered from them.
Officials said the militants were heavily armed as they used small fire arms and UBGLs to carry out the attack.
Pakistan-based Jaish-e-Mohammad terror outfit reportedly claimed responsibility for the attack.
In a telephonic call to a local news agency, a person claiming to be Jaish spokesman said three of its cadres carried out the attack.
Officials said it was not yet clear whether the attackers were a part of an infiltrating group.