Around 10 to 12 men armed with explosives and ammunition dressed in airport security personnel uniforms entered the Fokker building at the old airport terminal late last night, police sources said.
Heavy contingents of Pakistan army and police have been called in and had surrounded the Fokker building where the attackers were holed up.
A gun battle was still continuing inside the old airport near the hangers and workshop as military and other security personnel tried to clear up the runaway and surrounding area from the terrorists.
A spokesman of the Inter Services Pubic Relations confirmed that army units had been called from the nearby Malir cantonment base and said so far three terrorists had been killed in the gun battle while one blew himself up.
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Security forces had cleared up one side of the old airport after killing the terrorists but there was still resistance and heavy gunfire coming from another direction near a workshop, Sindh police spokesman said.
"They are 11 dead bodies inside right now including one police official and some ASF jawans but three terrorists have been killed while one blew himself up as we corned him," the spokesman, Imran Shaukat told reporters.
"No aircraft has been hit or damaged although the terrorists are carrying RPG rockets. The explosion and fire is because some oil tankers caught fire on the runaway," he said.
A spokesman for the paramilitary rangers also confirmed that four terrorists had been killed and said seven more were suspected to be hiding inside a hanger building.
He said all passengers and airport staff had been moved to safe places and the aircrafts secured with security personnel securing them from terrorist attacks.
But a source in the Civil Aviation Authority told PTI that the number of casualties could be high as several civilians had been killed or injured when the terrorists entered the airport terminal building.