An operation was launched against militants in Pakitan's Raiwind area in Lahore on Thursday.
Militants and Pakistani forces exchanged fire in a gun and grenade battle that began early in the day.
One militant in a safe house had been killed by security forces while one security personnel had also been killed, reports the Dawn
At least eight explosions were heard during the face-off while firing continued, said sources.
Police surveyed the area to ensure there were no hostages held up by the militants.
