Army and paramilitary troops raided the Madrassa Abu Shoaib school, near Miran Shah, the main town in North Waziristan province near the border with Afghanistan late on Tuesday, the military-run Inter Services Public Relations department said in a statement on Wednesday.
It said the school was being used "as a planning centre for target killings, rocket attacks on military installations, recruiting and training camp for terrorist activity".
Security forces seized a large cache of arms, munitions, booby traps, fuses and hand written notes on how to make explosive devices, it said.
One suspected fighter, identified as Malang, was killed and seven others, including a foreigner, were arrested, the statement said.
It did not provide the identity or nationality of the foreigner.
He was being questioned about other possible fighters' hideouts in the area, but did not appear to be a senior "terrorist" figure, an army official said on condition of anonymity.
None of the other six suspects, all local tribesmen, was named in the statement and it did not say which group they may have had links with.
Officials have said Arab, Afghan and Central Asian fighters, allegedly linked with al-Qaida, are in North and neighbouring South Waziristan tribal regions, which border Afghanistan.
Pakistan - a key ally in Washington's "war on terror" - has deployed thousands of troops to its border regions along Afghanistan and carried out several operations to hunt down fighters in the rugged area.