Algeria military
Fighters from the Tuareg separatist rebel group MNLA drive in the desert near TabankortReuters file photo

The Algerian army has said they have killed 22 Islamic State (Isis)-linked militants averting a major terror attack.

The counter-terror raid was carried out about 100km east of capital Algiers, said the defence ministry.

All the insurgents are thought to be members of Caliphate Soldiers, an al-Qaeda splinter group which has pledged allegiance to the Iraqi Islamist group IS.

"This is a major counter-terrorism operation, the largest in terms of militants killed in years. They were holding a meeting at the time," a security source told Reuters.

Two others were also captured alive by the security forces in the Boukram forest in Boumerdes. A stash of weapons has been seized as well.

The Al-Qaeda in the Islamic Maghreb (AQIM) is known to be active in the region carrying out radical attacks. The Algerian army has said they continue to hunt for other insurgents.

The Caliphate Soldiers were involved in the kidnapping and killing of a French tourist last September following which the Algerian forces intensified their operations. The latest raid has been one of the most important anti-terror operations in recent times in Algeria.