A shootout between security forces personnel and an armed group has been reported during a search operation at Sainthamaruthu, Kalmunai in Ampara District, a short while ago.
The shooting had taken place as Police Special Task Force (STF) personnel were engaged in a special search operation in the area.
The Special Task Force had reportedly attempted to raid a house in which terrorist suspects were hiding when they were met with gunfire from its occupants.
It has also been reported that one or two suspects blew themselves up following gunfire with the authorities.
No details of casualties were immediately available.
Police have been conducting raids across the country to find more details about the perpetrators and their supporters.
Islamic State has claimed responsibility for the Easter Sunday terror attacks that killed 253 hotel guests and Christian worshippers attending church services.
President Maithripala Sirisena has said police are looking for 140 people believed to have links with the Islamic State group.