The BNP has called a daylong general strike in the district for Thursday protesting against the death of its youth front activist.
Police said 20 others, including their personnel, were injured during the Wednesday afternoon clash.
At least six motorcycles were also set on fire and several business establishments vandalised at the time, said Begumganj Police Sation OC Ainul Haq, quoting witnesses.
A large contingent of police led by Noakhali SP Ilias Sharif had remained deployed in the area since they took control of the situation.
The two deceased were initially identified as 'Rubel' and 'Mohsin'.
District Juba Dal General Secretary Kamakkha Chandra Das claimed Rubel was their activist.
Noakhali General Hospital's Resident Medical Officer Farid Uddin said Rubel died before he was brought there while Mohsin passed away undergoing treatment.
Witnesses said the BNP-led 20-Party alliance leaders and activists took out a procession at Chowmuhani around 5pm in support of the countrywide transport blockade.
They fought pitched battles with the law enforcers when police intercepted them in the Rail Gate area.
Police finally contained the situation by shooting in the air.
OC Ainul Haq said the injured 20 people included Begumganj police Inspector (Investigation) Jasim Uddin and Chowmuhani Police outpost In-charge Jishan Ahmed.
At least five of the wounded received bullet injuries.
Noakhali SP Sharif said one of the torched vehicles was a police motorcycle. "We had to open fire following the arson attacks and vandalism."
He, however, said they had no information about anyone being shot dead by police.