In a pre-dawn operation on Tuesday, the Pakistan Army stormed the pro-Taliban Lal Masjid in central Islamabad to flush out militants holding a large number of women and children as hostages, triggering a fierce gunbattle which left 100 dead.

Twelve security personnel were among those killed while the rest were militants, DawnNews TV quoted the officials as saying.

Fifty militants were injured in the operation and an equal number of madrassa students and ultras surrendered.

Twenty-six women and three children were rescued from the besieged complex.

Deputy administrator of the mosque Abdul Rashid Ghazi, who is using women and children as human shields, is holed up in the basement of the mosque and has been asked to surrender.

The army launched Operation Silence at 0400 hours after last-ditch talks with Ghazi, brother of captured head of the mosque Maulana Abdul Aziz, to end the week-long standoff failed as he demanded a special deal for foreign militants.

Heavy gunfire erupted and loud blasts were heard as commandos surrounded the mosque, where militants are believed to be holding 150 hostages, from three sides.

Security forces were being challenged by militants, who are using rocket launchers and machine guns.

They have taken positions in the basement and were firing from the minarets of the mosque.

Army spokesman, Major General Waheed Arshad told reporters, "It is the final push to clear the mosque of armed militants."

Asked why the operation has taken this long, Arshad said troops followed a step-by-step approach to minimise casualties and to avoid collateral damage to the mosque.

The defence spokesman said the complex has over 75 rooms besides vast courtyards and basements and all needed to be cleared one by one.

"Various bunkers are yet to be cleared," Arshad said.

There are reports that women and children were locked up in the basement and security forces are trying to verify it.

The militants offered intense resistance as they appeared well-trained, he said adding, some terrorists have occupied the minarets of the mosque and are firing at security forces from there.

Arshad denied reports that Pakistan Army planned to use nerve gas against militants.

"Pakistan Army does not use nerve gas and has no stocks of it," he said.

Referring to Ghazi's claim that his mother was killed during the operation, he said the cleric had not allowed his own mother to go out for treatment.

The operation was launched as soon as ruling Pakistan Muslim League-Q president Shujaat Hussain in a brief nationally televised press conference said talks to find out a peaceful solution to the standoff had failed.

Hussain said he was never disappointed so much in life as an agreement could not be reached even after the government showed maximum flexibility. The operation came at the end of a seven day standoff during which over 1,300 boys and girls holed up in madrassa surrendered.