Local sources said that the slain militants include Dawood Ahmad Illahi of Hawora Kulgam and Sayar Ahmad Wani of Wanpora Kulgam.
Police sources said that two weapons have been recovered from the slain militants.
They said that an OGW of militants identified as Arif Sofi was also arrested during the gunfight. A pistol has been recovered from his possession, they said.
Earlier Government forces launched a cordon and search operation following inputs about the presence of militants in Khudwani area of Kulgam district.
A gunfight raged during the operation which ended on the killing of two local militants.