Indian soldiers fought with gunmen on Tuesday in disputed Kashmir, the army said, with a police officer reporting one suspected rebel had been killed.
The clash is the latest in a surge of fighting in Muslim-majority Kashmir, a Himalayan territory home to a long-running insurgency.
The Indian army's Chinar Corps said that a security operation had been launched after the reported "presence of terrorists" in the forests of Bandipore district, and that a "firefight ensued".
The army did not confirm a toll, saying that the "operation is in progress".
But a police officer, who was not authorised to speak to reporters, said that "one militant was killed in the encounter".
Kashmir has been divided between India and Pakistan since their independence from British rule in 1947, and is claimed by both in full.
India has at least 500,000 troops deployed in Kashmir, battling an insurgency that has killed tens of thousands of civilians, soldiers and rebels since 1989.
Rebel groups demand either independence for the territory or its merger with Pakistan.
New Delhi regularly blames Pakistan for arming militants and helping them launch attacks, an allegation Islamabad denies.
On Sunday, an attacker hurled a grenade at a busy market in the main city Srinagar, wounding 12 people.
Attacks since October have included gunmen launching an ambush on an army convoy, as well firing on a construction camp, killing seven people.