Punjab province Law Minister Rana Sanaullah told Dawn News late last night that Azhar, believed to be the mastermind behind the attack on the Air Force base in Pathankot, has been taken into "protective custody" and that he is not arrested.
However, the federal government has not confirmed Azhar's detention.
Meanwhile, Pakistan Prime Minister's Advisor on Foreign Affairs Sartaj Aziz said Pakistan and India are working on finalising new dates soon for the Foreign Secretary-level talks.
India has sought action by Pakistan on the evidence provided for apprehending the JeM terrorists suspected to have been involved in the January 2 attack. India has linked the fate of the talks to action by Pakistan.
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Officials said police yesterday raided and sealed a religious seminary operated by JeM in Sialkot town near the Indian border.
The raid was launched by Punjab's Counter-Terrorism Department (CTD), one of its officials said.