The Islamists were killed in an operation in the town of Kouinine near El-Oued, the defence ministry said on its website.
It also announced that soldiers had found an arms cache in the area on Friday, the second such discovery in 10 days.
Last year the Algerian army killed or arrested 157 "terrorists", according to ministry figures.
A brutal civil war in the 1990s between the government and Islamists claimed the lives of some 200,000 people.
Despite adopting a peace and reconciliation charter in 2005 aimed at turning the page on the conflict, armed groups remain active in central and eastern Algeria.
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