The fighting broke out on Wednesday in Shakai village near the South Waziristan district capital, Wana, after a dawn rocket attack on army posts.
This could signal the start of the Pakistan army's threatened second major offensive this year against the al-Qaida and Taliban-linked fighters.
"We have eight militants dead," the tribal territory's security chief Brigadier Mahmud Shah said.
Heavy weapons were being fired between paramilitary troops and a band of "foreign fighters" holed up in a house in Shakai, he said.
"They are using mortar, heavy machine guns and rockets. We are also using heavy weapons but not rockets," Shah told the private Geo television channel.
"This action will continue for some time but later we will have to go for an offensive against them," he said.
"This action will continue for some time but later we will have to go for an offensive against them"
Brigadier Mahmud Shah,
South Waziristan security chief
Since winding up a disaster-fraught offensive in the same region in March, Pakistani forces have been trying to persuade several hundred al-Qaida-linked fighters to lay down arms and register with authorities, under an amnesty deal that would allow them to live in the area.
But the foreigners, mainly Chechen and Uzbeks with some Chinese and Arabs among them, have refused to register. Local tribal elders have said they were scared of being photographed and identified.
Pakistan says up to 600 foreign fighters, including Arabs, Chechens and Uzbeks alleged to be linked to al-Qaida network, have been hiding out in tribal areas close to the Afghan border, many of them sheltered by Pakistani tribal fighters.
Meanwhile, US-led forces near Kandahar in Afghanistan called on jet fighters and helicopters to launch an assault on suspected Taliban fighters and may have killed as many as 20.
The US military also confirmed that five of its Marines and an Afghan soldier and interpreter were wounded in a clash on Tuesday night.
The skirmish took place in the Daychopan district in Zabul province.
Captain Eric Dent said fighting had been particularly fierce after US forces narrowly avoided an ambush, though he was not able to confirm casualty figures.