SRINAGAR: Two terrorists were killed in an encounter with security forces in Budgam district of Jammu and Kashmir on Thursday, police said.

"Security forces launched an operation based on credible inputs about the presence of terrorists in Zagoo locality of Khansahib area in the district," a police official said.

He said during the operation, the terrorists fired on the search party, which was retaliated by the security forces.

"During the exchange of fire, two terrorists were neutralized. Their identities are being ascertained," the police official said.

Arms and ammunition were recovered from the encounter site, he said.