A fierce gun battle was in progress in a Jammu and Kashmir village Friday after two guerrillas sneaked into a shrine following a cordon and search operation and security forces surrounded it.

The holed up guerrillas have started firing at the surrounding troops at Wallerhama (Sellar) village in south Kashmir's Anantnag district, 72 km from here, police said.

Security forces had laid a cordon at the village following information that a group of guerrillas was hiding in the village.

"Two militants, one of them believed to be a top commander of Jaish-e-Mohammad outfit known as 'Doctor', who is a foreigner, and his associate entered the  shrine in Wallerhama (Sellar) village after security forces cordoned off the area," said Javaid Mukhdoomi, inspector general of police (Kashmir).

"Police were acting on specific information that the top Jaish commander was hiding in the village with some of his associates," Mukhdoomi told IANS here.

The inspector general of police also said the village shrine had been surrounded by the security forces who were taking every precaution to ensure that the shrine did not get damaged in the encounter.

Reports reaching here said the holed up guerrillas were engaging the troops in heavy automatic fire.

Senior police officers, including Sheikh Owais, deputy inspector general of police south Kashmir range, have rushed to the spot.

Wallerhama village is situated on the Kellar-Pahalgam road, but is away from the traditional route used by the pilgrims to the Holy Hindu cave shrine of Amarnath.

The annual Amarnath pilgrimage begins here on June 21 via the north Kashmir Baltal route. The pilgrimage on the traditional Pahalgam route starts on July 6.