An explosion was reported in Sri Lanka before police exchanged gunfire with suspects as part of the ongoing investigation into the Easter Sunday bomb attacks.
Armed forces attempted to raid a building believed to have been used to manufacture suicide vests, local media reported.
Brigadier Sumith Atapattu said a gun battle was under way in the coastal town of Sammanthurai, 200 miles from the capital, Colombo.
Local militants with ties to the Islamic State group conducted a series of suicide bombings on Easter Sunday at churches and luxury hotels in and around Colombo and in the distant seaside village of Batticaloa.
Around 250 people were killed, the health ministry said.
The total number killed in the Easter Sunday attacks was revised down by more than 100 on Thursday.
Police have since been conducting raids across the country to find more details about the perpetrators and their supporters.
President Maithripala Sirisena told reporters Sri Lankan police are trying to track down 140 people believed linked to Islamic State.
Nearly 10,000 soldiers were deployed across the Indian Ocean island state to carry out searches and provide security for religious centres, the military said on Friday.
Police have detained at least 76 people, including foreigners from Syria and Egypt, in their investigations so far.
Nine bombers co-ordinated blasts targeting churches and hotels frequented by foreign tourists on Sunday.
Most of the victims were Sri Lankans, although authorities said at least 38 foreigners were also killed, many of them tourists sitting down to breakfast at top-end hotels when the bombers struck.
