The encounter began late last night after terrorists opened fire on the patrol party carrying out a search operation in North Kashmir's Amargarh area after receiving information about the presence of terrorists.
"The terrorists were killed in Amargarh area of Sopore in an encounter with police, army and the Central Reserve Police Force (CRPF)," police spokesman Manoj Pandita told IANS.
"Arms and ammunition have also been recovered from the slain terrorists. The exact identity of the terrorists is being established." he said.
Three rifles were also recovered from their possession, police said.
(With inputs from IANS)