The police said it launched an anti-militancy operation in Chanakhan in Sopore, 55 kilometres from Srinagar, with the assistance of the Army following information about the presence of militants in the area.
"As the cordon around the house where the militants were hiding was being tightened, they hurled a grenade and started indiscriminate firing at security forces," a police official said.
Despite the area being cordoned off and presence of additional security, the militants managed to escape under the cover of firing.
Besides the Special Operations Group (SOG) of the police, soldiers of counter-insurgency Rashtriya Rifles and troopers of the Central Reserve Police Force (CRPF) were also engaged in the operation.
The cop who died was an assistant sub-inspector or ASI. Three other injured policemen were moved to Srinagar for treatment.