Six people were killed in a raid on a police station in Jammu and Kashmir near the border with Pakistan on Thursday and militants then attacked a nearby army camp where a shootout was going on, police said.
The attack came as Prime Minister Manmohan Singh and Pakistan's Nawaz Sharif were due to meet on the sidelines of the United Nations General Assembly meeting. They were expected to discuss the violence in the disputed Kashmir region.
After attacking the police station, the militants hijacked a truck, said Rajesh Kumar, an inspector general of police in the area.
"They abandoned the truck on the national highway and perhaps took another vehicle and carried out an attack on the army camp in Samba. The gunfight inside the camp is going on," he said.
Television footage showed police officials taking positions and firing from just outside the camp's walls and closing the main gate. Wounded policemen were being lifted out.
India has faced an insurgency in its part of Muslim-majority Kashmir since 1989 and has long accused Pakistan of supporting the militants fighting Indian rule.
Pakistan denies arming or training the militants, who cross the border from the Pakistani side of Kashmir into the Indian side, but says it offers moral support to the Muslim people of Kashmir who Pakistan says face rights abuses by Indian forces.
According to South Asia Terrorism Portal, which tracks violence in Kashmir, 128 people, including 44 security personnel were killed in the region this year, up to the latest attack. That compares with 117 people killed last year.