The early morning operation by government forces left five militants dead at Kilam in southern Kulgam district.
The slain militants have been identified as Zeeshan of Ashmuji, Ibrahim of Arwani, Khubaib of Qaimoho, Arhan of Zongalpora and Uzir of Gopalpora of Kulgam district.
The encounter followed after the siege of the village by soldiers of 9-RR and Special Operation Group (SOG) on a tip off about the presence of militants in the village.
As the government forces zeroed in on the specific hideout, militants opened fire which led to the encounter.
Five bodies were recovered from the encounter site.
Hundreds of residents hit streets in support of militants as the encounter was going on. Authorities suspended the internet service in the area.
Meanwhile a photojournalist was beaten up by protesting mob after provocation by some local Molvi.
In a separate incident, suspected militants lobbed a grenade on a police party at Lal Chowk in Srinagar in which 10 persons including four policemen, three CRPF personnel and three civilians were injured.
The injured policemen were identified as Ashiq Ahmed, Abid Ahmed , Muhammad Shafi, and Nasir Ahmed while as CRPF men were identified as ASI R Munaswami, constable Vishal and Constable Davinder of 132 battalaion.
The injured civilians were identified as Humaira wife of Sajad Ahmed Baba of Harwan, Abdul Qayoom of Mandibal Nowshera and Taliba Gulsan wife of Iftkhiar Ahmed of Dalgate,Srinagar. All the injured are stable,a police official said.