Police said the security forces started a cordon and search operation during night in Panzgam village after receiving information about the presence of militants there.

The hiding militants were challenged after which they opened fire at the security forces, triggering an encounter.

"Two militants have been killed and their bodies have been recovered. Although firing exchanges have now stopped, the operation is still on," a police officer said.

One of the slain militants has been identified as Showkat Ahmad Dar, a resident of Panzgam village. He belonged to the Hizbul Mujahideen (HM) outfit.

The identity and group affiliation of the other slain militant is being ascertained, informed sources said.