Security forces and police launched a cordon-and-search operation in Jammu and Kashmir's Poonch district on Friday following reports of movement of suspected terrorists, officials said.
They said there were intelligence inputs about suspicious movement in the Dera Ki Gali-Bafliaz area of the district.
According to sources, around three armed men were spotted in the area and there was a brief exchange of fire between the suspected terrorists and security personnel.
A senior police officer said the entire region around the identified location has been cordoned off and the search operation is underway.