"Troops raided a militant hideout on Friday in an area adjoining Orakzai and Khyber tribal districts -- near the Afghan border -- where the insurgents had gathered for a meeting," a military statement said.
"An intense battle took place, in which 16 terrorists were killed and 20 injured. Fleeing terrorists left behind nine dead bodies of their accomplices. Troops arrested two critically wounded militants while four soldiers were also wounded in the battle," it said.
Media reports had earlier put the death toll in the gun battle at 20 but later scaled it down to 16.
Meanwhile, 39 militants, including two terrorist commanders, were killed in airstrikes by Pakistani fighter jets in the restive Dattakhel area.
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"Yesterday Dattakhel strikes; Took out huge UG ammo depot, explosions heard even by pilots. Death toll rises to 39 incl 2 Terrorist comds," military spokesman Asim Bajwa tweeted.
Orakzai is one of Pakistan's seven semi-autonomous tribal regions in the northwest, where militants linked to Pakistani Taliban and al-Qaeda are believed to have their stronghold.
The army has intensified its offensive after the massacre of 150 people in Army Public School in Peshawar this month.
According to the military, it has killed over 1,200 militants since the start of operation Zarb-e-Azb in June against militants in North Waziristan.