It said automatic weapons, ammunition and other weaponry were seized in the "anti-terrorist" operation yesterday in the Ferkioua area of Bouira province.
Islamist-linked violence rocked the North African country in the 1990s but has since waned, although armed groups remain active in central and eastern Algeria where they mount attacks on security forces.
The army said it has now killed 56 armed Islamists since the start of the year.