An army major and three soldiers were killed while foiling an infiltration bid in north Kashmir's Gurez sector, officials said on Tuesday.
At least two terrorists were gunned down in the operation, they said.
The encounter between the army's patrolling party and the infiltrating group took place at Govind Nallah in Gurez sector of Bandipore district.
The bodies of two terrorists could be seen from a distance while two more are believed to have been killed, they said.
Further reinforcements were rushed to the encounter site.
The deceased have been identified as Major K P Rane, hawaldars Jamie Singh and Vikramjeet and rifleman Mandeep.
Initial reports said a group of eight was trying to infiltrate into the country.
Of them, four ran back to Pakistan-occupied-Kashmir, officials said.