Thirteen suspects were captured alive as an elite police unit swooped on houses across the country's main island of Java, in the biggest counter-terrorism operation in Indonesia for months.
As well as investigating links to the embassy plot, which has underscored growing anger in Indonesia at anti-Muslim violence in largely Buddhist Myanmar, police were targeting suspected terrorist fund-raisers.
In the latest raid, police shot dead three suspects at a rented house in Kebumen district in Central Java and arrested four others early today after a 15-hour firefight, said national police spokesman Boy Rafli Amar.
Pipe bombs, grenades and pistols were seized from the property, said local police chief Heru Prisasono.
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Amar said police were also investigating if they were linked to a plot uncovered last week to bomb the Myanmar embassy.
Yesterday police shot dead three men suspected of involvement in the Myanmar plot who were holed up at a house at Bandung in West Java. The killings followed a seven-hour gunbattle, during which the men hurled homemade bombs at police.
In total, police carried out around 10 raids across Java.
The anti-terror operation came after police last week detained two men suspected of planning to bomb the Myanmar embassy in Jakarta.
Myanmar has been rocked by several recent outbreaks of religious violence, which have left many minority Muslims dead and tens of thousands displaced.
Indonesia has mounted a crackdown against terror networks over the past decade in the wake of several deadly attacks on Western targets, and key militant groups have been weakened.