After a brief pause, seven militants hiding in Kathua district in Jammu and Kashmir resumed firing on advancing security personnel as the gun battle entered the fourth day on Friday.
The militants had stopped firing in the morning, but resumed targeting the special units of army, which started closing in on them around noon in Ghati area of the district, defence sources said.
Hundreds of army, Central Reserve Police Force and police personnel, have thrown a cordon around the bushes where the militants, believed to be from Lashkar-e-Tayiba, have been hiding and firing on security forces since Tuesday afternoon.
As the firing stopped in the morning, security forces believed either the ultras had been killed or run out of ammunition.
The firing had stopped for a short while on Thursday evening, but continued
A defence spokesman said so far the strategy of the forces was 'wait-and-watch' and wearing out the terrorists.
The forces initially wrongly assessed the quantity of ammunition in possession of the terrorists, defence sources said.
A reinforcement of 300 army personnel had joined the forces to speed up the operation.
The encounter, the longest so far, has left a jawan dead and six, including a Village Defence Committee member, injured.
Officials quoting militant intercepts say two among the militants were also seriously injured in the exchange of fire.
The encounter began on a tip off by a local about the presence of the heavily armed militants who infiltrated on Monday night. The local was kidnapped by the ultras, but gave them a slip.