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Pakistan's security forces killed 25 of 35 Islamist militants holed up in a counter-terrorism centre in the northwestern city of Bannu, while one hostage and two commandos died in the operation to retake the compound, the army said.

Militants being held at the centre took control of the compound on Sunday after overpowering their interrogators and taking their weapons, leading to a two day siege and ultimately army commandoes storming the compound on Tuesday.

"Resurgence in terrorism poses a renewed threat to our national security," Prime Minister Shehbaz Sharif said in a tweet, adding, "Our valiant security forces are fully capable of dealing with this threat."

Army spokesman Major General Ahmed Sharif speaking to local TV channel Geo News late on Tuesday said seven of the 35 holed up militants surrendered, and another three who tried to escape were arrested. One hostage, a security official, died during the raid, he said.

Earlier on Tuesday, Defence Minister Khawaja Asif said all of the militants had been killed and all hostages rescued, but later clarified that the army would provide the final figures and details of the operation.

The army spokesman's comments provided the first detailed official account of the standoff, in which two security personnel were killed when the militants first took over the compound, and two commandoes killed in the ensuing raid.

He said one militant was able to first overpower his interrogator with a brick and seize his weapon. Later other militants at the centre broke into a storeroom where confiscated weapons had been stored.

"We tried very hard to get them (militants) to surrender unconditionally. They weren't ready," Sharif said, adding that they wanted safe passage to Afghanistan, which was rejected by authorities.

STANDOFF

After talks failed to resolve a two-day standoff, army commandos stormed the centre on Tuesday. Ten soldiers, including three officers, were also wounded.

Sharif described the raid being a fierce firefight. Earlier, residents said they heard explosions coming from the vicinity of the centre on Tuesday as helicopters hovered overhead.

The militants mostly belonged to the Tehreek-e-Taliban Pakistan (TTP), an umbrella group of Sunni Islamist and sectarian groups that associates itself with the Afghan Taliban.

The TTP emerged to fight the Pakistani state and enforce its own harsh brand of Islam in the years after U.S.-led allied forces intervened in neighbouring Afghanistan to oust its ruling Taliban in 2001 and drive them over the border into Pakistan.

The TTP has ramped up attacks in recent weeks since announcing the end of an Afghan Taliban-brokered ceasefire with the Islamabad last month.

The TTP initially confirmed the militants' demand to be given passage to Afghanistan, but later said Pakistan's former tribal regions were also safe for the militants to flee to. (Reuters)