Two CRPF personnel and a constable of Jammu and Kashmir police lost the lives in the attack on the compound, which also houses many residential buildings, officials said.
As the operation began, security forces rescued nearly two dozen families staying there to avoid any hostage situation. However, two special police officers were still missing.
"In the early hours this morning, terrorists entered the District Police Lines (DPL) Pulwama and they entered the family quarters. There were a lot of families there.
It is a "fidayeen" (suicide) attack, he said, adding it was too early to ascertain the identity of the militants.
The GoC said while few police personnel where still inside one of the blocks of the DPL, there was no hostage situation.
"No, we do not have a hostage situation in Pulwama. There were families in those blocks, but we have taken them out and right now, the terrorists are there. In one of the blocks, there are a few policemen, but that is all. We will be able to handle it," he said.
"He was gunned down on the spot. His body is lying near a building," the official said.
He said the exchange of firing between the militants and security forces is going on.
"The firing is coming from three directions, indicating that there might be three more militants holed up in those buildings," the official said, adding para commandos have been pressed into action.
The official also said all the families of the police personnel have been evacuated from the premises and there was no hostage situation.
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