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A helicopter pilot was also wounded by the gunmen during the operation.
At least 17 people were killed and 20 wounded in bombings and shootings in Iraq on Tuesday, police said.
Iraqi army forces backed by helicopters clashed with an Al Qaeda militant hideout in the Himreen mountain range, some 50 km east of Diyala's provincial capital Baquba, Xinhua reported citing a source.
The fierce clashes resulted in the killing of four militants and the capture of seven others, all of whom were wanted for terrorism charges, the source said. A helicopter pilot was also wounded by the gunmen during the operation.
A farmer was killed and his relative wounded when gunmen fired at them near a bridge located in northeast of Baquba, a provincial police source said.
A worker in a Sunni mosque was wounded by gunmen who fired at him in front of his house in a town located some 20 km northeast of Baquba, the source added.
Sectarian tension and reprisal killings have increased recently between Sunni and Shiite Muslims in the volatile province of Diyala, as Sunnis and Shiites accuse each other of supporting extremists and militiamen.
Diyala province which stretches from the eastern edges of Baghdad to the Iranian border east of the country has long been a volatile area since the US-led invasion of Iraq in 2003 despite repeated military operations against the militant groups.
Earlier in the day, a police source from Iraq's western province of Anbar said that a suicide bomber blew up his explosive-laden car at the entrance of the house of Waqass Adnan, mayor of the city of Aana, some 250 km west of Baghdad.
The blast was immediately followed by a coordinated attack on the guards of the house, apparently in an attempt to break into the house, the source said.
The battle resulted in the killing of four policemen and the brother of the mayor, and the wounding of four policemen, while the mayor himself escaped unharmed, the source said, adding four gunmen were also killed in the clashes.
Another suicide bomber rammed his explosive-packed car into the entrance of Aana police station and blew it up, killing two policemen and wounding three others, the source said.
In a separate incident, gunmen fired mortars at a police station in Rawa city, about 255 km west of Baghdad, killing a policeman and wounding seven others, he said.
Iraq is witnessing its worst eruption of violence in recent years, which raises fears that the country is sliding back to full-blown civil conflict that peaked in 2006 and 2007, when monthly death toll sometimes exceeded 3,000.
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