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The firefight took place late Saturday in Saravan county of Sistan-Baluchistan province, which straddles the border with Pakistan, said the official IRNA news agency.

The two dead were identified as Guards commando Mohsen Naghibi and local Basij member Abdolkhalegh Derazehi.

Sistan-Baluchistan has long been a flashpoint, where Pakistan-based Baluchi separatists and jihadists carry out cross-border raids.

The jihadist outfit Jaish al-Adl ("Army of Justice") has in the past attacked and abducted Iranian security personnel.

The most recent attack killed 27 Guards in a February 13 suicide bombing which targeted a busload of the unit in the volatile region.

Iran's president urged Islamabad to take "decisive action" against militants based on its soil following the deadly attack.

Hassan Rouhani warned Pakistan's prime minister that a failure to clampdown on militants in the country could see relations between Tehran and Islamabad badly damaged.

"We are awaiting your decisive operations against these terrorists," Rouhani told Pakistan Prime Minister Imran Khan during a phone conversation in March, according to Iranian state media.

"We should not allow decades of friendship and fraternity between the two countries to be affected by the actions of small terrorist groups, the source of whose financing and arms is known to both of us."

Khan reportedly told Rouhani that he has "good news" for Iran on the subject, Reuters reported.

"It is in Pakistan’s own interest not to allow our territory to be used by terrorist groups, and the Pakistani army is prepared to confront the terrorists more decisively with the information provided by Iran," Khan responded.

Iran directed a number of verbal barbs and threats at Pakistan following the killings, whilst also blaming regional rivals Israel and Saudi Arabia.

Iran's elite Revolutionary Guards have already warned that they are "ready to give a decisive answer to the terrorists in coordination with Islamabad".

Jaish al-Adl was formed in 2012 as a successor to the Sunni extremist group Jundallah (Soldiers of God), which waged a deadly insurgency for a decade before it was severely weakened by the capture and execution of its leader Abdolmalek Rigi in 2010.

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