According to reports, three militants, including a top Lashkar-e-Taiba (LeT) commander, are believed to be holed up in a house.
Due to darkness the operation has been called off for the night and it will start early on Tuesday morning.
Gun battle was on when last report came.
Earlier in the day, unidentified militants shot dead a Chadoora Station House Officer (SHO) in central Kashmir.
According to sources, the militants targeted the SHO when he was in the local market in the afternoon.
He succumbed to his injuries in hospital.
The deceased officer was identified as Syed Shabir Ahmad.
Sources said that the deceased cop belonged to Uri village of North Kashmir.
Three other security guards were injured while they were on duty with him.
Two of the injured cops were identified as constable Mohammad Shafi and Special Police Officer (SPO) Firdous Ahmad.
No terror group has claimed responsibility for the attack so far.
--IBNS (Posted on 02-12-2013)