Tragedy struck when a bridge across the Jhelum river collapsed, taking down 24 labourers busy in giving it final touches, on Sunday.
The labourers, most of them non-locals, are feared dead.
A senior police officer said that the bridge collapsed suddenly in the Jhelum, which flows to Pakistan-occupied Kashmir near village Prampilla.
"The bridge collapsed in the middle into the river. The labourers working on the bridge were washed away into the Jhelum, which had swollen because of the recent heavy snowfall and rains," a senior police officer said.
Police and army rescue teams, who reached the spot minutes after the tragedy, launched a massive rescue and relief operation.
"The rescue teams managed to save two of the injured labourers who were taken to the hospital," he said.
"So far we have recovered three bodies and search is on to trace others," the officer said.
The bridge has been under construction and was nearing completion on Jhelum to connect the border villages across the Srinagar-Muzaffarabad road.
Kashmir was lashed by heavy and snow on Friday, which affected normal life and marked the beginning of an early bitter winter.