The counterterrorism raid on the house in the town of Pir Mahal triggered a shootout after someone inside began lobbing hand grenades, police official Khalid Rashid said.
He said the raid was part of the investigation into the assassination of Punjab provincial home minister Shuja Khanzada, who was killed along with 17 others in an attack by two suicide bombers in his northwestern hometown earlier this month.
Habibur Rehman, the militant who died today, was a Pakistani Taliban member, Rashid said. He said the militant initially used his wife as a human shield, but then set off the explosives when he was surrounded.