In the present study, using static land system parameters, such as geomorphology, land cover, and relief, we calculated the water yield potential (RP) of all the watersheds of the Jhelum basin (Kashmir Valley) using the analytical hierarchy process (AHP) based watershed evaluation model (AHP-WEM). The results revealed that among the 24 watersheds of the Jhelum basin, the 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 the case of a 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 the forecasting of the floods in the watersheds that had a small lag time, such as in the case of Vishaw, Bringi, and Lidder, we evaluated the performance of the HEC-GeoHMS hydrological model to simulate stream discharge during storm events. It was observed that the model performs well for August-September period with a 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.