The terrorists, identified as Muhammad Rizwan and Imran Saqi, were killed in a late night raid on a house in Multan district on Wednesday, the Punjab Police's counter terrorism department (CTD) department said.
They were also involved in the killing of three intelligence officers. In a statement, the CTD said it received information that five terrorists of banned terror group ISIS were hiding in a house in the district, around 350 km from Lahore.
It said a team surrounded the house and told the terrorists to surrender. "The terrorists instead of surrendering opened fire on the raiding team which returned fire, killing two terrorists on the spot while three of their accomplices managed to escape taking advantage of darkness," the CTD said.
The terrorists had planned to attack personnel of intelligence agencies. Nine hand grenades, explosives and weapons were seized from the house, it said.
They were involved in the kidnapping of US national Warren Weinstein in 2011 and Yosuf Gilani's son Ali Haider Gilani in 2013.
Weinstein, who was abducted from Lahore, was accidentally killed in a US drone strike in 2015 on the Afghan border, while Haider Gilani was rescued from Afghanistan after three years.
The terrorists had also killed two police officers in Faisalabad in an attempt to kidnap a senior law enforcement officer. Earlier this year, security agencies killed two other members of the group in Faisalabad in Punjab province.