Two militants and a soldier were killed and another soldier injured in a gunfight that erupted on Monday between the security forces and militants holed up in a house in Jammu and Kashmir's Kulgam district, officials said.

Two terrorists were killed and a soldier killed in the gunfight, said Defence Ministry spokesman Colonel Rajesh Kalia.

According to a police official, the gunfight broke out when militants fired at an army patrol on the Jammu-Srinagar National Highway in Qazigund area of Kulgam, injuring two soldiers.

After the attack, the militants, said to be two in number, entered a private house which was surrounded immediately by the security forces.

"When the militants were challenged, they fired at the security forces, triggering a gunfight which continued for nearly four hours. Two militants have been killed, but the body of only one, who was a local, has been recovered," police said.

The house in which the militants were hiding was fully destroyed during the gunfight.

Traffic on the Jammu-Srinagar highway remained suspended because of the gunfight. Train service between the Kashmir Valley and Bannihal town in Jammu region was also disrupted.