The slain terrorists were involved in Sunday attack on a police party in which a policeman, SgCt Ab Salam, lost his life.
A civilian was also injured in the gunfight.
Two AK-47s and a pistol have been recovered from the site of the encounter.
Troops of 182 battalion and 183 battalion Central Reserve Police Force (CRPF), along with 44 Rashtriya Rifles (RR) and the Jammu and Kashmir Police were carrying out a cordon and search operation (CASO) in the region, when the encounter broke out. (ANI)