The bodies of 15 people including six children were found after an explosion at a suspected Islamist militant hideout in east Sri Lanka, police said.
Police said the dead also included three women, believed to be family members of the suspected militants.
Residents said they heard an explosion followed by gunfire over several hours.
The clashes took place in Sainthamaruthu, not far from the home town of the suspected ringleader of the Easter Sunday suicide attacks.
Around the same time, security forces raided another building in a nearby town where they said they found explosives and a drone.
Sri Lanka has been on high alert since a co-ordinated wave of bombings last Sunday killed at least 250 people and wounded more than 500.
The bombings targeted churches which were packed full for the Easter holiday, as well as hotels popular with tourists.
Sri Lankan authorities blamed a local Islamist extremist group, National Tawheed Jamath, for the attacks, although the Islamic State group (IS) has also claimed it played a role.
Security forces have carried out raids across the country since the attacks, but officials say there are dozen of Islamic State sympathisers still at large in the country.
Police said the raid on Friday followed a tip-off about a location in a Muslim majority town of Ampara Sainthamaruthu, near Batticaloa.
An armed group at the location set off an explosion and a gun battle ensued, police said. When troops moved in after dawn on Saturday they found 15 bodies in the burnt-out building, believed to be those of the suspected gunmen and family members, but also some civilians caught in the crossfire, police said.
The area is not far from the home town of radical preacher Zahran Hashim, the suspected ringleader of the attacks, who is said to have died in one of the bombings on Sunday.
In another raid in the same town, IS flags, 150 sticks of gelignite explosive, thousands of steel pellets and a drone camera were found, a military spokesman said.
According to local media reports, 10 arrests were made across the country on Friday, bringing the total number detained since last Sunday to 80.
President Maithripala Sirisena has told reporters that intelligence services believed about 130 suspects linked to IS were in the country and that police were hunting 70 still at large.
The Catholic Church in Sri Lanka has cancelled all Sunday Masses until further notice. Archbishop of Colombo Malcolm Ranjith said he had seen a leaked security document warning of further attacks.
Cardinal Ranjith said that the Church had not been told about intelligence warnings of possible attacks. "We didn't know anything. It came as a thunderbolt for us," he told reporters.
Asked about the warnings, he said: "I felt betrayed a little bit. I felt sad. It's a very serious lapse on the part of the security agencies that they didn't tell us about it."He said the church would halt all services until further notice, and urged parishioners to instead "stay indoors and do their prayers".
Security was stepped up around mosques for Friday prayers, while some Muslims stayed away, fearing revenge attacks.