The encounter erupted at Jumagund in Keran sector after Army and Police intercepted a group of infiltrating militants following a specific input about their movement.
Additional Director General of Police Vijay Kumar said five militants were killed in the operation.
"Five (5) foreign terrorists killed in the encounter. Search in the area is going on," ADGP Kashmir was quoted in a police tweet.
The identity and the group affiliation of the slain militants could not be ascertained immediately.
This is the first major infiltration attempt that has been foiled along the LoC in Kashmir this year. Three days ago two militants suspected to be foreigners and members of Hizbul Mujahideen were killed in a gun battle in the Machil sector of Kupwara.
This year five infiltration bids have been foiled in Kupwara district.