Search for children
Two dozen relatives of those inside waited anxiously behind security barriers on Friday, about 200m from the mosque.
During lulls in the fighting, about 10 parents approached the building and handed notes to those inside with the names of their children, who then emerged.
Most were young students at the mosque's religious school.
Gunfire rang out around the mosque before dawn and again later on Friday morning.
Armed troops and barbed wire coils on the streets near the mosque prevented people from going near the scene.
The government is believed to be keen to avoid bloodshed that would further damage the president's embattled administration and said troops would not storm the mosque while women and children were inside.
Ghazi, whose brother Abdul Aziz was captured on Wednesday while trying to flee the mosque dressed in a burqa, urged the government to lift the siege of the mosque.
Speaking to the private Geo television station on Friday, he said: "We have decided that we can be martyred, but we will not surrender. We are ready for our heads to be cut off, but we will not bow to them.
"This may be my last conversation with you."
Officials have said that women and children are being held inside as human shields, but Ghazi said they were there of their own free will.
"I had said that we will fight to the last, and now after seeing what they have done to the mosque and the way they have martyred children, I ask them to stop this brutality," Ghazi said.
"We were ready to leave everything in order to stop bloodshed."
Tariq Azeem, the deputy information minister, dismissed the offer, saying that Ghazi was hiding in the mosque's basement with 20 women and an unknown number of children and could not escape justice.
One day before, Abdul Aziz had called on his followers still inside the complex to surrender or flee.
Dozens of students from the mosque and its religious school had surrendered on Thursday and about 1,200 students walked out the day before in exchange for a pardon and a payment of $83 (5,000 rupees).
Azeem had said that all women and children would be granted amnesty, but men involved in killings and other crimes as well as mosque leaders would face legal action.
|Abdul Aziz went on TV to call on followers still |
inside the mosque to surrender or flee [AFP]
Abdul Aziz said on Thursday, that about 850 students remained inside, including 600 women and girls, and 14 men who were armed with Kalashnikovs.
The siege began when the Pakistani army surrounded the mosque on Wednesday, a day after at least 12 people were killed in clashes between security forces and armed activists from the mosque.
Liberal politicians had been pressing Pervez Musharraf, Pakistan's president, for months to crack down on the brothers running the Red mosque and the president accused the mosque of sheltering al-Qaeda members.
The students carried out a series of provocative acts over the past six months, demanding the enforcement of Islamic law, and running a vigilante anti-vice campaign.
Source: Al Jazeera and agencies