"Kangan Police and the Army's 24 Rashtriya Rifles killed five militants on the fringes of the Najwan forest near Prang in Ganderbal district in the wee hours today," said a police spokesperson.
Police sources said an operation was launched around midnight after security forces got a tip-off about militants in the area.
"An ambush was laid and the militants were challenged while they were trying to cross the Sind River. But the militants fired at the security forces, which resulted in an encounter," said a police official.
Though most members of the Hizbul Mujahideen are Kashmiris, all five killed in friday's encounter were non-locals. This group is believed to have been active in Ganderbal district for past seven years.
Police said the encounter was over but search operations were still on in the area.