In the present study, using static land system parameters such as geomorphology, land cover and relief, we calculated water yield potential (RP) of all the watersheds of the Jhelum basin (Kashmir Valley) using analytical hierarchy process (AHP) based watershed evaluation model (AHP-WEM). The results revealed that among the 24 watersheds of the Jhelum basin, Vishav watershed with the highest RP is the fastest water yielding catchment of the Jhelum basin followed by Bringi, Lidder, Kuthar, Sind, Madhumati, Rembiara, Sukhnag, Dal, Wular-II, Romshi, Sandran, Ferozpur, Viji-Dhakil, Ningal, Lower Jhelum, Pohru, Arin, Doodganga, Arapal, Anchar, Wular-I, Gundar, and Garzan in case of same intensity storm event. The results were validated with the mean annual peak discharge values of the watersheds and a strong positive correlation of 0.71 was found. Further, for forecasting the floods in the watersheds having small lag time, such as in case of Vishaw, Bringi and Lidder, we evaluated the performance of HEC-GeoHMS hydrological model to simulate stream discharge during storm events. It was observed that the model performs well for august-september period with strong positive correlation (0.94) between the observed and simulated discharge and hence could be used as a flood forecasting model for this period in the region.