The army on Thursday foiled an infiltration bid and gunned down a terrorist in an encounter along the Line of Control in Jammu and Kashmir's Poonch district, officials said.

"At about 1000 hours today, alert soldiers of the army observed suspicious movement of some individuals along the Line of Control in the Poonch sector (J-K), wherein they were trying to infiltrate across the Line of Control into the Indian side," a defence spokesman said.

The soldiers challenged the infiltrators who opened fire on them, he said, adding that in an ensuing fire fight, one terrorist was killed.

"His body has been recovered along with two AK-47 rifles, a pistol and war-like stores," the spokesman said.

"The operation continues and a search of the area is underway," he said.