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Friday’s encounter between security personnel and the terrorists occurred in the higher reaches of the Halan forest area of Kulgam in south Kashmir.
The gunfight ensued after the terrorists fired upon a security forces party, which had erected a tent in the area as part of an area domination exercise, the officials said.
In the exchange of fire, three Army personnel were injured. They died later during treatment.
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They said a tight cordon was maintained throughout the night and the search operation was launched on Saturday morning to trace the ultras, believed to be three in number. The officials said the group is believed to have recently infiltrated through the Pir Panjal range.
They said additional troops have been rushed to the area and the search has been intensified.
Another search operation has been launched in the Kund area of the district after a blast-like sound was heard there, the officials said.
Some Army vehicles were passing through the area when the sound was heard, they said.
A police team has rushed to the spot and further details were awaited, the officials added.