 Several hundred rebels were involved in the attack on policemen |
Three security personnel were also killed in the clashes, officials say.
The fighting comes days after 13 policemen were killed when 500 Maoist rebels attacked a police compound in the state's Nayagarh district.
The rebels stole a huge amount of weapons and ammunition from the site's armoury during Friday night's attack.
Orissa police chief Gopal C Nanda said 115 rifles, a carbine and half a truckload of ammunition stolen by the rebels have been recovered from a forest in neighbouring Kandhamal district.
'Biggest threat'
The police said heavy fighting between the rebels and security forces was going on around the Gosamal hills in Kandhamal district.
Around 600 federal paramilitary forces along with 100 men belonging to an special anti-Maoist force and armed police have surrounded the forests where the rebels are believed to be hiding, officials say.
Indian Air Force helicopters are also flying over the area to track down the rebels.
The Maoists are active in many states across east and central India. They focus on areas where people are poor but there is great mineral wealth.
The rebels say they represent the rights of landless farmhands and tribal communities. Hundreds of people have died over the past few years in Maoist-related violence.
The Indian Prime Minister, Manmohan Singh, recently described the rebels as the biggest threat to the country's security and called for a dedicated security force to combat them.
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