The four were ambushed while waiting for a bus in the town of Tulungagung in East Java province after days of surveillance, said National police spokesman Maj. Gen. Ronny Frengky Sompie.
He said they were wanted for their alleged involvement in terrorism activities in Java, the Central Sulawesi district of Poso, as well as Bali and north Sumatra.
The suspects were shot by the anti-terror unit, known as Detachment 88, when they resisted arrest and fired at police, Sompie said. A revolver and a bag containing a bomb were confiscated.
Indonesia has been battling terrorists since the 2002 Bali bombings that killed 202 people, mostly foreign tourists.
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