The encounter broke out after the security forces launched an anti-terror operation in Anantnag.
The operation was launched after receiving inputs that some terrorists were hiding in the area.
This comes after a similar encounter broke out in Kashmir's summer capital Srinagar.
The Khanyar locality was cordoned off and a search operation was launched after the security forces received inputs about the presence of terrorists in the locality.
The encounter began after terrorists fired at the forces.