Activities of the nearby Srinagar airport have been curtailed and the Kashmir Valley School located close by has been ordered shut.
Meanwhile, Pakistan based terror outfit, Jaish-e-Mohammad (JeM) has claimed responsibility of the attack.
Piecing together the chain of events, police said terrorists entered the BSF's 182 Battalion headquarters through a damaged perimeter wall and started firing in all directions.
New Delhi regularly accuses Pakistan of arming and training militants and allowing them across the restive frontier in an attempt to launch attacks on Indian forces.
An Assistant Sub Inspector (ASI) of the BSF was also killed during the gunfight while as four forces personnel sustained injuries. The suicide squad fired indiscriminately and lobbed grenades while entering the fortified camp, police sources said.
The weapon room of the BSF camp seemed to the target of the terrorists, he said, adding that their attempt was foiled by an alert sentry who challenged them. "There is enough intelligence to believe that we can expect more attacks by them", said an intelligence official, requesting anonymity. Security forces initially asked the militant to surrender.
One BSF trooper was killed in the attack, while three other jawans were injured. "I personally went to the airport and ensured that the public does not face any problems in catching the aircraft", Vaid said.
A senior police official said that militants came from the Friends Colony side of the BSF camp.
The civilian air sorties are made from 7 am to 5 pm and after that, the airport is used only by the IAF authorities for their operations.
Flight operations, which were suspended on Tuesday morning, have resumed.
Besides being a highly guarded security zone because of the location of the strategic airport, many top former bureaucrats, police officials and politicians have residences in the area. "It is being suspected that the Pulwama attackers and Humhama attackers are all part of the same group", Khan said on Tuesday afternoon.