The encounter is taking place in Chari Sharief area in Budgam district.
Two terrorists have been reportedly killed in an encounter with security forces in Jammu and Kashmir's Budgam district. The encounter is still underway between security forces and a third terrorist, police said.
The operation is being carried out by a team comprising Rashtriya Rifles, Budgam police and CRPF officials.
The area has been placed under cordon.
Security forces launched a cordon and search operation following information about presence of terrorists in the area, news agency Press Trust of India reported.
The search operation turned into a gunbattle after terrorists opened fire on security forces.
With inputs from PTI