The gunmen entered the Bacha Khan University named after iconic leader Khan Abdul Ghaffar Khan alias Baacha Khan in Charsadda, some 50 kms southwest of Peshawar, and opened fire on students and teachers in classrooms and hostels, police said.
Blasts and heavy gunfire were heard from inside the campus where a poetic symposium was in progress to mark the death anniversary of Baacha Khan who died on January 20, 1988.
The injured were shifted to hospital. An emergency has been declared in all hospitals in the town. All schools have been closed in the area.
Today's attack comes a little over a year after Taliban militants massacred over 150 people, mostly students, in an assault on an army-run school in Peshawar in December, 2014.
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Yousafzai said between four to 10 attackers were involved in the attack.
"Such cowardice attack could not shake the resolve of the Government in the fight against terrorism," he said.
Pakistan Army troops also rushed to the University from Peshawar and started operation.
Army spokesman Lt Gen Asim Salim Bajwa tweeted that four terrorists were killed during operation launched by security forces to clear the University.
"Snipers killed 2 more terrorists on roof top, total Terrorist killed so far 4. All buildings & roof top taken over by Army...," he tweeted. "Clearance of university block by block continues by Army troops."
Earlier, two terrorists who were firing from inside the university block were shot and killed by the army. The terrorists were contained in two blocks within the university and troops, commandos are participating in the operation.
It said clearance operation is underway in the campus. Army helicopters are hovering over the University.
Tehreek-e-Taliban Pakistan claimed the responsibility for the attack and said it was carried out by four attackers.
A spokesman of the militant group called media houses and said it was revengefor those killed by security forces since Peshawar school attack. The attacks would continue, he warned.
University Chancellor Dr Fazal Rahim said there were over 3,000 students inside the university along with an additional 600 guests who had arrived to attend a poetic symposium to mark the death anniversary of Khan Abdul Ghaffar Khan.