A Pakistani army officer was killed on Sunday while leading an operation to demolish the outside walls of an Islamabad mosque, where Islamist students have been holed up in a days-long standoff.

Militants inside the seminary adjoining the Lal Masjid, or Red Mosque, responded with gunfire after army forces tried to blast through the walls for a second day, an army official said.

A broken window is seen after heavy gunfire at the Red Mosque in Islamabad on Sunday.
(Anjum Naveed/Associated Press)

The man killed was a lieutenant-colonel and one of two commandos hit by gunfire, Maj.-Gen Waheed Arshad said. One of the soldiers remains in hospital. Both men belonged to the army's Special Services Group, an elite force that President Gen. Pervez Musharraf once commanded.

The students are led by clerics seeking to impose Islamic law, or Shariah, in the capital. They have been running an anti-vice campaign for months, abducting alleged prostitutes and attacking police.

On July 3, after tensions between government security forces and Islamic students erupted into deadly street clashes, armoured vehicles and hundreds of troops — many sheltered behind sandbags — surrounded the mosque and seminary.

More than 1,200 people, mainly students from the mosque's two Islamic schools, have since fled the complex. Officials say up to 100 armed militants and an unknown number of students remain inside.

Troops have been trying to blast holes in the walls in the hopes that women and children inside will escape, but have held back from an all-out assault.

At least 20 people have been in killed in the siege, government officials say.

Gunfire and heavy explosions could be heard just after midnight Sunday and then sporadically throughout the dawn hours, punctuating the thunder of a fierce monsoon downpour. By midmorning Sunday, both the gunfire and rain had stopped.

Arshad said security forces have used explosives to blast six or seven holes in the perimeter walls of the embattled school and several people have escaped through them.

Three paramilitary troops were wounded on Saturday, he said.

Musharraf warns holdouts

Musharraf, in his first public statement on the siege, warned Saturday that the holdouts risk being killed if they don't surrender.

The president said his government had exercised restraint to ensure the safety of women and children, who government officials say are being held hostage by one of the most senior clerics, Abdul Rashid Ghazi.

Ghazi, a former civil servant turned rigid Islamist, said he and his followers prefer martyrdom to the unconditional surrender demanded by the government. He denies holding anyone against their will.

While the government says 20 people have died since the siege began, Ghazi was quoted on Saturday as saying the number is closer to 70.

The conflicting claims were difficult to assess independently. Journalists, first allowed within about 200 metres of the mosque, were on Saturday pushed back another 300 metres or more from the embattled area.

The government says the militants are armed with assault rifles, grenades, petrol bombs and other weaponry.

With files from the Associated Press