Security forces killed two terrorists in an intense encounter in the Juthana area of the Kathua district on Thursday.
Five security personnel, including Deputy Superintendent of Police (DSP) Dheeraj Katoch, sustained injuries during the gunfight.
The injured policemen were shifted to a hospital, where two are reported to be in critical condition.
The identity of the slain terrorists is being verified.
Security forces launched the operation after a local woman reported seeing two men in army uniforms asking for water.
Security forces, including the Army, National Security Guard, Border Security Force, Special Operations Group, and Central Reserve Police Force, have been conducting a massive search in the region using helicopters, UAVs, drones, and sniffer dogs.
Officials tightened security along the Jammu-Pathankot National Highway and nearby border roads.
Security agencies detained three suspects for questioning.
During the search, forces recovered two grenades and a large cache of ammunition. Some tracksuits found in the area matched those worn by Jaish-e-Muhammad (JeM) terrorists killed in earlier encounters.
The operation, led by Jammu and Kashmir DGP Nalin Prabhat, started on Sunday after intelligence reports confirmed a terrorist presence near the International Border with Pakistan.
Security agencies believe the terrorists may have infiltrated through a ravine or a newly dug tunnel.
The encounter follows the brutal killing of three civilians in Kathua on March 5.
Their bodies were discovered after an extensive search.
In response, Union Home Secretary Govind Mohan visited Jammu to review security for upcoming events, including the Amarnath Yatra and the Udhampur-Srinagar-Baramulla Rail Link inauguration.
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