Three terrorists were eliminated while a jawan was killed in an ongoing operation in the Batote area along the Jammu-Kishtwar national highway on Saturday, an army officer said, as the nearly nine-hour long search operation entered its final stage.

The militants were encircled by the search parties inside a house in the main market after they managed their escape from the scene of the earlier encounter in the highway town in Ramban district, officials said.

'We have killed three terrorists in the gunfight, which has ended. One soldier was also martyred during the action,' Jammu-based army PRO Lt Col Devender Anand told PTI.

He said the search operation is still going on and further details are awaited.

Earlier, a police spokesman said a group of five terrorists are trapped in the town.

The trapped terrorists had fired at the Quick Reaction Team (QRT) of the army in the morning and tried to escape but were chased by the security forces and encircled in a house, he said.

The officials said the fresh exchange of fire started between the holed up terrorists and the security forces at around 1 pm after an intense search operation.

The house owner was believed to be trapped inside the house and efforts are on to evacuate him to safety, while his other family members have been evacuated to safety after they managed to come out, they said, adding the ultras had forced their entry into the house while being chased by the security forces.

The whole area was cordoned off to neutralise the terrorists, who are believed to have come from the Kishtwar side and had reportedly spent the night at an abandoned temporary shelter shed on the highway, the officials said.

Lt Col Anand said, 'Today (Saturday) morning at about 7.30 am, two suspicious individuals tried to stop a civilian vehicle at the general area Batote on the highway. The driver was alert, did not stop the vehicle and rushed and informed the nearest Army post.'

'The quick reaction team reacted promptly and contact was established with the suspicious individuals,' he said.

The movement of traffic on the highway was stopped following the incident as a precautionary measure, they said.