The gunfight has been going on since last night in Kiloora village of the district, where several youth came out to protest against the government forces, leading to clashes.
At least 20 civilians have been injured in the clashes, the hospital authorities said.
Five militants have been killed in the ongoing gunfight so far.
The government forces are engaged in the gunfight and clashes with the protestors near the site.
“Initially it came across that one civilian had lost his life in cross firing but subsequent investigation confirmed that no such civilian death had occurred and reports pertaining to the civilian death were inaccurate. Pertinently the encounter later took place in an open area as the hiding militants, taking advantage of darkness came out of the house and fired indiscriminately on Security forces,” said a police statement.