Police say the raid took place early Sunday at a house on the outskirts of Mombasa, Kenya's main port city.
Officials say one of the suspects was killed in the house while another man was killed while trying to escape.
The raid was the most recent in a series of confrontations between police, Islamists and separatists along Kenya's coast.
Supporters al-Shabab have carried out several attacks in opposition to Kenya's decision to send troops into Somalia to fight extremist militants there. VoA.