All four terrorists were wearing army combat uniform and were heavily armed; AK-56 rifles, under barrel grenade launchers, ammunition have been recovered from them during the mop-up operations, the army said in a statement.

While no group has claimed responsibility for the attack, the police say they were possibly likely members of a squad of Jaish-e- Mohammad named after Afzal Guru, the parliament attack convict who was hanged in 2013.

Army chief Bipin Rawat reviewed the anti-terror operations in Jammu this morning as the encounter stretched into its second day.

Intermittent firing carried on through the day as the soldiers combed through the camp where the terrorist was supposed to be holed up.

The terrorists, who were on a suicide attack, had entered from the back of the camp, sources said. Around 4:55 am, the sentries noticed some suspicious movement and the sentry bunker came under fire. After a brief exchange of fire, the terrorists managed to enter the complex, the army statement said.

The Sunjuwan Army camp has over 150 houses in the campus. Most apartments were evacuated after the pre-dawn strike, but some women and children got injured.

A pregnant woman, who was injured in the attack, has delivered a baby girl after the doctors at the army hospital in Satwari managed to save her life. Rifleman Nazir Ahmed and his pregnant wife were injured in the firing at the family quarters of the armymen.

Among the injured is a daughter of a junior Army officer. A 14-year-old boy with gunshot wound to his head is fighting for his life.

Jammu was put on high alert and schools near the camp were asked to close down immediately. The army camp is close to two shopping centres and public schools.