The search operation turned into an encounter after the militants fired upon the security personnel, who retaliated.
It is the first instance when militants have tested Covid positive in Jammu and Kashmir after the outbreak of the deadly pandemic.
The official said in the ensuing gunfight, three militants were killed and their bodies retrieved from the site of the encounter.
Militants fired upon a police party near Yaripora Chowk in the south Kashmir district in the afternoon, a police official said.
Security forces launched a cordon and search operation in Yamrach area of the south Kashmir district during the night after receiving specific input on the presence of militants.
Police sources said that following specific intelligence inputs about their presence in the Hardmanguri Batpora area, security forces launched an operation late last evening.
Sub-Divisional Officer South Dinajpur Debanjan Roy stressed that the migrant labourers will be provided all necessary assistance and efforts will be made to provide them employment.
The state government had arranged for a special coach for the workers, who expressed their desire to return in the wake of the brutal killing of labourers in Kashmir on October 29, the official said.
In Kashmir's Kulgam, the Bengali labourers didn't knew that their decision to defer their visit to native place would prove fatal.
The labourers were threatened regularly by the terror groups to leave the valley as they were 'non-Kashmiris'.
As many as two policemen and one civilian were injured after terrorists hurled a grenade at a police station here in Kulgam.