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Local television stations showed the two sides trading gunfire, The Times of London reported.

Security forces said the militants on Tuesday slipped over the border from Pakistan disguised as police.

"The infiltrators in police uniform opened indiscriminate fire at several places before barging into a house near Chinore area", Brig. P Murli of the Indian army told The Times.

A steady stream of small but violent incidents in the region that splits India and Pakistan has been occurring in recent weeks. At least 28 people have been killed in the past two months.

Observers say the unrest has helped charge a resurgent separatist movement among Kashmir's Muslims.

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