Large numbers of soldiers and policemen had surrounded the house in Maidanpora village, an army spokesman said.
Up to five militants were in the house, Lt-Col JS Brar told the BBC.
Kashmir, which is claimed by both India and Pakistan, has recently seen a drop in violence.
Thousands of people have been killed in the region since an armed rebellion against Indian rule erupted in 1989.
The operation in Kupwara was launched early on Friday morning after the army received information that some militants were holding a meeting in the house, Lt-Col Brar said.
Security forces began firing after the woman emerged from the house, officials said.
Residents had been asked to leave the area, reports said.
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