"We have launched a search operation in South Waziristan to arrest foreign terrorists," military spokesman Major-General Shaukat Sultan said.

He implied contact had been made with a group of suspects in South Waziristan, in the North West Frontier Province.

"The governor asked them to surrender voluntarily and unconditionally, but they refused," he said.

Witnesses in Wana, the capital of South Waziristan, said they had heard heavy firing in two villages on the outskirts of the town and military helicopters were flying overhead since just before daybreak.

Officials in the area said the operation was taking place at Kalu Shah, about 40km from the border with Afghanistan.

"Helicopters are hovering over the area and firing at targets," a local official said.

Major operation

In October last year, Pakistani troops conducted a major operation in South Waziristan, killing eight al-Qaida suspects and arresting 18.

Two Pakistani soldiers were also killed in a gunbattle with the suspects.

South Waziristan lies opposite the eastern Afghan province of Paktika and has long been suspected of being a safe haven for al-Qaida and resurgent Taliban fighters fleeing US-led forces in Afghanistan.

Wana is 330km southwest of capital Islamabad.

US troops have frequently chased suspected Taliban attackers to the border, only to see them slip through the unmarked border into Pakistan's semi-autonomous tribal areas.