Fazul Abdullah, 38, is thought to have planned the massive truck bombings in Nairobi and Dar es Salaam that killed 224 people in 1998 and had a $5 million bounty on his head.
Kenyan Police Commissioner Mathew Iteere told AFP Saturday that authorities in Somalia had given the identity of one of two "terrorists" killed in Somalia on Wednesday as Fazul Muhammad.
It confirmed a report from a commander of Somalia's rebel Al-Shebab movement who told AFP earlier this week on condition of anonymity, "One of the men that was killed near Mogadishu was Fazul Abdullah, may Allah bless his soul.
"He is not dead as thousands like him are still in the fight against the enemy of Allah."
Officials with the Somali Transitional Government (TFG) said the men were killed at a roadblock on Tuesday night.
"Our forces fired on two men who refused to stop at a roadblock. They tried to defend themselves when they were surrounded by our men," TFG military commander Abdikarim Yusuf told AFP.
"We took their ID documents, one of which was a foreign passport," he said, adding that an investigation was under way.