Sri Lankan military officials stand guard in front of St Anthony's Shrine, Kochchikade church after an explosion in Colombo. Photograph:( Reuters )
Local media reports said the military was searching for makeshift bomb factory when the gunbattle started.
A gun battle erupted during a search and cordon operation in Sri Lanka's eastern province. Lankan soldiers opened fire on suspected terrorists, reports said.
Sri Lanka's military spokesman said gun battle with suspects was still underway.
An explosion was reported from Sainthamaruthu in Kalmunai. Soldiers went in to investigate an explosion in the town of Ampara Sainthamaruthu in Batticaloa east, during a search operation, Reuters reported the spokesperson as saying, and were fired upon.
Local media reports said the military was searching for a makeshift bomb factory when the gun battle started.
The police found various apparatus to be used in making explosives including bags of metal balls, gelignite sticks and fuel during the raid.
An Islamic State(IS) flag was also found by soldiers.
Earlier in the day, President Maithripala Sirisena had said the police were looking for 140 people believed to have links with the Islamic State terrorist group over the Easter Sunday attacks on churches and hotels that killed at least 253 people.
"We now have info that there are about 140 people in Sri Lanka linked to the Islamic State. We can and we will eradicate all of them very soon," Sirisena said, announcing that there would also be new legislation to ban extremist groups.
Sirisena told reporters some Sri Lankan youths had been involved with the extremist group since 2013, and that top defence and police chiefs had not shared information with him about the impending attacks.
Several countries including Israel, Australia and Britain have warned their citizens against visiting Sri Lanka in the wake of the attacks.
Authorities on Thursday had reduced the death toll of the terror attacks from 360 dead to 253, saying badly mutilated bodies were double counted.