Sri Lankan security forces raided a hideout in a predominantly Muslim neighbourhood in the Eastern province on Friday evening, triggering a standoff with heavily-armed men believed to be linked to the deadly Easter attacks.
Police spokesman said that at least one suicide bomber blew himself up during the shootout in the coastal town of Sammanthurai, 325 kilometers from Colombo.
Police said they have seized a large haul of explosives, a drone and a banner with the Islamic State logo.
"Garbs similar to that which were worn in the video displaying IS members in Sri Lanka, along with an identical IS backdrop in the video was discovered during the raid," a police official said.
Nine suicide bombers carried out a series of devastating blasts that tore through three churches and three luxury hotels on the Easter Sunday, killing 253 people.
The Islamic State claimed the attacks, but the government has blamed local Islamist extremist group called National Tawheed Jamath (NTJ) for the attacks.
Hours after the deadly blasts, police launched a manhunt to nab the perpetrators and so far arrested over 70 suspects, including five women.