"The exchange of firing between security forces and militants began at around 3:40 am and is going on intermittently," a police official said.
The militants had entered into the premises of DPS Srinagar last evening after carrying out an attack on the CRPF personnel deployed on road opening duty near the school on Srinagar-Jammu national highway.
One CRPF officer was killed and a constable of the force injured in the attack that took place in a high-security zone located less than a kilometre away from headquarters of Army's Chinar Corps.
The security forces immediately cordoned off the area and launched search operations in the large school campus.
Sources said drone cameras and other hi-tech gadgets were used to trace the location of the militants but police officials refused to comment on operational details.