"Encounter has started at Gopalpora area of Kulgam. Police and security forces are on the job," a statement said.
The firefight between terrorists and security forces took place after a joint team of the police and the army cordoned off the area and launched a search operation on the basis of specific information about presence of terrorists.
As the security forces zeroed in on the spot where terrorists were hiding they came under a heavy volume of fire that triggered the encounter.
Earlier on Wednesday, an encounter started at Pombay area of Kulgam which is still raging on.