The army said the incident happened when a group of armed militants attacked one of its camps in Uri.
The fighting between the militants and security forces which began early on Friday is continuing.
The incident comes as the region is holding staggered polls for the Muslim-majority state's 87 seats.
The five-phase elections, which are being held amid tight security, began on 25 November. The third phase is due on Tuesday and results are due on 23 December.
Reports say the militants had entered the army camp and begun shooting at the security forces.
An army official told the BBC that seven soldiers and two policemen were killed in the attack.
The army says it is looking for one militant who they suspect is still holed up inside the camp.
The disputed Kashmir region is claimed by both India and Pakistan.
It has been a flashpoint for more than 60 years and the rivals have fought two wars over the region.
In October, the two sides traded warnings over a surge in violence in Kashmir which killed at least 19 people.
Exchanges in the disputed area are not uncommon but rarely result in fatalities - the recent violence was some of the worst in a decade.
The fighting between the militants and security forces which began early on Friday is continuing.
The incident comes as the region is holding staggered polls for the Muslim-majority state's 87 seats.
The five-phase elections, which are being held amid tight security, began on 25 November. The third phase is due on Tuesday and results are due on 23 December.
Reports say the militants had entered the army camp and begun shooting at the security forces.
An army official told the BBC that seven soldiers and two policemen were killed in the attack.
The army says it is looking for one militant who they suspect is still holed up inside the camp.
The disputed Kashmir region is claimed by both India and Pakistan.
It has been a flashpoint for more than 60 years and the rivals have fought two wars over the region.
In October, the two sides traded warnings over a surge in violence in Kashmir which killed at least 19 people.
Exchanges in the disputed area are not uncommon but rarely result in fatalities - the recent violence was some of the worst in a decade.
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