There was no immediate reports of casualties.
Navy and army soldiers are carrying out the operation, sources said.
"At around 4:50 pm (local time) we got reports that there are three to four armed men in PC Hotel," the officer said.
Frontier Corps personnel have cordoned off the hotel, DawnNewsTV reported citing police sources.
On April 18, unidentified gunmen donning uniforms of paramilitary soldiers massacred at least 14 passengers, including Pakistan Navy personnel, after forcing them to disembark from buses on a highway in Balochistan.
Balochistan, which borders Afghanistan and Iran, is Pakistan's largest and poorest province, rife with ethnic, sectarian and separatist insurgencies.
The CPEC, launched in 2015, is a planned network of roads, railways and energy projects linking China's resource-rich Xinjiang Uyghur Autonomous Region with Pakistan's strategic Gwadar Port on the Arabian Sea.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)