In another incident, an oil tanker bringing fuel for helicopters was set ablaze. There was no word on casualties.

   

Pakistan's army on Monday said it had surrounded hundreds of al-Qaida suspects and their local tribal allies in the desolate mountains of South Waziristan near the Afghan border. Tribal elders are trying to negotiate their surrender.

 

Pakistani troops discovered a two-km long tunnel running under a remote tribal village where 500 al-Qaida-linked fighters were believed to be defending a senior leader, a security commander said on Monday.

 

Tribesmen flee

   

Amid fears that the Pakistani military was planning a second offensive in the border region, hundreds of tribesmen abandoned a key tribal town near the Afghan border on Monday.

  

The exodus of shopkeepers from Wana, the main town in tribal South Waziristan, took place as thousands of troops called a ceasefire in their siege of hundreds of fighters in villages 15 km away.

  

Pakistani forces have been bombarding the fighters, believed to be sheltering a "high value target", for the past week.

 

"There is an unprecedented panic and chaos, people are using trucks, pick-ups and tractors to move their belongings to safer places"

Residents, Wana town

Members of the Yargulkhel tribe, blamed for sheltering foreign al-Qaida loyalists, started vacating their shops in South Waziristan's main town Wana early on Monday and some 300 shops in several shopping complexes were empty by the afternoon, witnesses said.

  

"There is an unprecedented panic and chaos, people are using trucks, pick-ups and tractors to move their belongings to safer places," they said.

  

Wana has several multi-storey buildings housing hundreds of shops where the tribesmen run medical, grocery and stationery stores.

  

"We fear the fighting may intensify, that is why we are taking out the stocks," a Yargulkhel shopkeeper said.

 

Authorities in the area have been working to obtain the handover of the fighters for some time, warning tribesmen that if they did not hand over the wanted men the authorities would demolish their homes and shops.

  

Local administration official Rehmatullah Wazir confirmed that the government reserved the right to "take action against the shops and homes of Yargulkhel tribesmen at any time."

  

President Pervez Musharraf has said that fighters besieged in the nearby offensive appeared to be protecting a "high value target".