The squad had launched an anti-encroachment operation in the main market of Township area of Lahore this morning along with police.
Trader Faisal Ali told PTI that when the squad demolished an illegally constructed shop, a signboard bearing verses from the Quran was also pulled down.
Traders began shouting "blasphemy, the squad has committed blasphemy", witnesses said.
People gathered in the market began pelting stones at members of the anti-encroachment squad and police.
The policemen and anti-encroachment squad personnel initially ran for their lives. Later, police used batons and fired in the air to disperse protesters and control the situation.
The police arrested 11 protesters.
The traders association of the area demanded strict action against those who committed "blasphemy" and the release of the arrested traders.
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