The gunbattle broke out between security forces and militants at Budh Shungani in Handwara area, 90 kms from here, official sources said.
Troops of 6 Rashtriya Rifles and police had launched an anti-militancy operation last night following information about movement of three to four militants in the area.
They said one militant has been killed so far. The encounter was in progress till last reports came in.
Six militants have been killed in three separate operations in Handwara area this month.
