Militants killed five members of a family, including three children, on Sunday night at Kheri Khawai village in Rajouri district.
Militants forcibly entered the house of Kaiser-ud-Din and fired indiscriminately, killing him, his wife Rafia and his three children, Raj Hussain, Mohammad Showkat and Mohammad Khan.
A police party has rushed to the spot, police sources said. No group has yet claimed responsibility for the attack.
Security forces, on receiving the news, mounted a massive operation in the upper reaches of Rajouri and Poonch to flush out the militants.
Condemning the killing, Chief Minister Mufti Mohammad Sayeed said the incident was a 'deliberate attempt' to vitiate the atmosphere of peace.