An explosion rocked Sri Lanka as police opened fire at a suicide vest factory during a raid on suspected terrorists linked to the Easter Sunday massacre.

Shooting erupted between security forces and a group of men in the east of the country during a search operation, a military spokesman said.

The raid took place in the town of Sainthamaruthu, 200 miles from Colombo where 253 people were killed in luxury hotels and churches on Sunday.

Several of the terror suspects blew themselves up as the authorities opened fire, according to Ada Derana.

An ISIS banner is held up by Sri Lankan security personnel following their raid on suspected terrorists in the Samanthurai area on Friday evening

A drone camera was uncovered as part of the raid on the bomb making operation at Samanthurai

Local media reported 100,000 ball bearings were uncovered during the raid at Samanthurai as well as 100,000 sticks of explosive gelignite

The location was a suicide vest manufacturing hide-out, News First reported.

Earlier on Friday evening, a large bomb-making operation was uncovered at a raid in the Samanthurai area - around five miles away from the scene of the shootout.

Sri Lanka's security forces said the location was believed to have been used by Islamist radicals to record a video pledging allegiance to Islamic State leader Abu Bakr al-Baghdadi before carrying out the deadly Easter attacks.

'We have found the backdrop the group used to record their video,' the police said in a statement.

There were 150 sticks of explosive gelignite, 100,000 ball bearings, ISIS uniforms and an ISIS flag, as well as a drone camera.

Police believed the Islamic State uniforms were similar to those worn by the eight fighters for the film they made ahead of Sunday's attacks.

The video was released by ISIS two days after the bombings.

Photos showed what appeared to be large canisters of fuel as well as detonating devices and tubing believed to have been part of a bomb manufacturing operation, News First said.

The Special Task Force uncovered a suicide manufacturing hide-out as they engaged with suspected terrorists on Friday (pictured: bomb-making equipment recovered earlier on Friday evening in the Samanthurai area around five miles away)

Local media reported the police took hold of a massive haul of bomb-making equipment in the Samanthurai area, around five miles away from the shootout

Cables were recovered along with other bomb making in the Samanthurai before the shootout took place

A security officer stands guard outside St. Anthony's Shrine on Friday after the Easter Sunday bombings

A military spokesman said there was an explosion in the area and when soldiers went to investigate they were fired upon. No details of casualties were immediately available.

The news comes as the country remains on high alert since the suicide bombings on churches and hotels in which more than 250 people were killed on Easter Sunday.

Police and the army have been conducting raids as they gather intelligence about the perpetrators and their supporters. Islamic State has claimed responsibility.