Two soldiers of 21 Rashtriya Rifles and two militants were killed in a gun battle in Handwara in Jammu and Kashmir on Friday morning.
According to police, the Handwara Police and the Indian Army had laid a trap and the challenged the militants at night, triggering an encounter.
Sources said the operations are on as more militants are believed to be hiding in the area.
Last month, militants attacked a police post in Jammu and Kashmir's Udhampur district, ambushed a Border Security Force convoy and killed two soldiers.
A Pakistani militant Mohammed Naved was captured after the attack.
"I am from Pakistan and my partner was killed in the firing but I escaped. Had I been killed, it would have been Allah's doing. There is fun in doing this … I came to kill Hindus," the suspected Lashkar-e-Taiba operative had told investigators.
Another Pakistani militant, Sajad, was captured following a two-day encounter in north Kashmir weeks after Naved's arrest.
Apart from incidences of ceasefire violations by the Pakistani army, there have been a number of militant attacks in Jammu and Kashmir in the last few months.
Experts have said that the recent attacks show a trend of militants striking far away from the Line of Control and the International Border and deep into the Jammu region.
Read | A change in strategy: Why militants are shifting focus to Jammu