They said SOG personnel, on a specific information, launched a search operation at Batakoot in Pahalgam area at 1330 hrs.
On seeing the SOG personnel, militants, believed to be two in number, opened fire on them which was effectively retaliated, resulting in a fierce gun-battle, the sources added.
One militant has been killed in the encounter so far, they said, adding his identity was being ascertained.
The sources said the search for another militant, believed to be a top commander, was on when reports last came in.
UNI AG MIR DB1831