The decision has been taken for the sake of local residents' security, Moulvibazar Deputy Commissioner Tofael Islam told bdnews24.com.
Bursts of gunfire and explosions could be heard from the two houses since early Wednesday morning after police sealed off the houses.
One of the houses is located at Barhahaat neighbourhood of the district town, the other 18km away in Sadar Upazila's Khalilpur Union council.
The vehicles will not be able to ply and pedestrian movements will be restricted in Moulvibazar municipality's Ward 6, Kushumbagh neighourhood and in a 2km radius of the house being raided at Khalilpur Union Council on the outskirts of the town, DC Islam said.
He, however, said traffic on the Dhaka-Moulvibazar Highway near the town's Barhahaat area will not be affected.
Home Minister Asaduzzaman Khan told the media in Dhaka that as many as 10 suspected militants may be holed up inside the two houses. A SWAT team is already on its way to Moulvibazar and the army will be called in if needed, he said.