The report, posted on the official police website, says the firefight took place today morning in a neighborhood in the city of Kermanshah, which is located about 500 kilometers, southwest of the capital, Tehran.
It says police confiscated a Kalashnikov assault rifle and a suicide vest at the site of the clash.
The report didn't identify the militants, though it called them "takfiris," a derogatory term in both Arabic and Farsi referring to extremist Sunni Muslims such as members of the Islamic State group who accuse other Muslims of being infidels.