Two suspected militants were killed and eight arrested Friday after a gunfight in Aceh province, where police have been carrying out counter-terrorism raids since February.

A police source told an AFP correspondent at the scene that the two were shot dead after they jumped out of a minivan being monitored by police in Aceh Besar district's Leupung area and opened fire while trying to escape.

The remaining passengers in the vehicle were arrested. Police also seized five rifles, a semi-automatic pistol and 25 bullets.

"Two people were killed in the follow-up of anti-terror raids in Aceh province," national police chief detective Ito Sumardi confirmed.

Police in February launched a major anti-terrorism raid on a militant training facility in Aceh Besar, about 70 kilometres (40 miles) from the provincial capital, Banda Aceh.

Aceh police identified the two dead militants as Pura Sudarma and Encang Kurnia alias Jaja.

"One of the dead militants, Jaja, is a long-time fugitive who was involved in several terror activities," Aceh police chief Aditya Warman said.

A police source said Jaja was allegedly involved in the 2001 bombing of Plaza Atrium Senen, a shopping mall in Jakarta, that injured several people.

Jaja had also undergone militant training in southern Philippines, the source added.

The latest arrests follow the death of a senior leader of the Jemaah Islamiyah militant group, who was shot dead by police on the outskirts of Jakarta on Tuesday.

Dulmatin, who was accused of masterminding the 2002 Bali bombings that killed 202 people, was buried Friday morning in his home village in Central Java province.