"Officers of the special purpose center of Russia's Federal Security Service in interaction with Interior Ministry troops special forces discovered the bodies of nine militants and the base of a large gang group 3 km from the Kakashur village," the source said.
The two-day special operation in Kakashur started after a clash on Wednesday between law enforcement officers and militants. Police then encircled a group of 10 to 15 armed fighters. Five servicemen were killed and three law enforcement officers wounded.
The source also said that some militants could have been killed by missile and bomb strikes.
The militants are thought to be members of a group aligned to Magomedali Vagabov, who is on a federal and international wanted list for attacks on police officers and terrorist-related crimes.
Sporadic terrorist attacks and militant clashes are common in Daghestan, and in neighboring Chechnya, although the Kremlin has officially ended its military campaign to fight separatists and terrorists there.