Security forces have killed five terrorists in an operation that is continuing for the last 15 hours in Hayatabad area of Peshawar.
A policeman also lost his life in the shootout between security forces and terrorists holed up at house in Phase VII.
Police and army commandos were taking part in the operation.
Peshawar Corps Commander Lt. General Shaheen Mazhar visited the spot and commended the skills displayed by soldiers during the operation.
The Corps Commander directed the authorities to ensure that daily routine of the citizens is not affected by the security operation.
He said the residents of the area have extended full cooperation and it was incumbent upon the forces to exercise caution in order to ensure their safety.
General Shaheen Mazhar said Special Services Group (SSG) could also be called in if need arises.
On the other hand, Khyber Paktunkhwa Information Minister Shaukat Yousafzai said the police surrounded the area after being informed that terrorists involved in an attack on a judge and an Additional IG were present in the area.
He said six to seven terrorists equipped with suicide jackets and other arms were holed up in the area.
The minister said two floors of the building have been cleared but the terrorists were still offering resistance from the upper part of the house.