Director General of Police (DGP) S P Vaid said the slain militants were apparently Pakistanis.
Security forces launched a cordon and search operation in the early hours in Unisoo village of Handwara following specific intelligence inputs about the presence of militants in the area, a police official said.
He said the search operation turned into an encounter as the hiding militants fired upon the forces conducting the searches.
During the gunfight, three militants were killed, the official said adding the slain militants were most probably affiliated with the Lashkar-e-Toiba (LeT).
One woman was also killed in the exchange of fire, the official said.
Vaid said on Twitter, "In Unisoo Handwara all the three terrorists apparently Pakistanis have been neutralised by Joint team of J&K Police, RR & CRPF.It has been raining whole night & boys were out there in the cold".