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The gunfight erupted at village Manzgam in Kulgam district, about 85 km south of Srinagar city, the summer capital of Indian-controlled Kashmir.
"In a gunfight in village Manzgam today, three militants have been killed so far," a senior police official posted in Kulgam said. "Initially the firing stopped but as the forces moved closer to the spot, the firing resumed, suggesting presence of the fourth militant."
The police official said the exchange of fire between the two sides was going on until last reports poured in.
According to police, the gunfight broke out after army and police jointly cordoned off the area on specific intelligence information suggesting the presence of militants.
"No sooner the joint contingents of army and police reached near the suspected area, the militants present there fired upon them, thereby triggering a gunfight," the police official said.
The identity of the slain militants was not immediately known.