Acting on a tip off, a team of Counter Terrorism Department (CTD) on Saturday raided a house near Sheikhupura bypass where nine to ten members of banned Tehreek-i-Taliban Pakistan (TTP) were hiding.
They tried to escape by using a car and two motorcycles and were chased up to a branch road where they opened fire at the cops, forcing the security personnel to retaliate, the CTD spokesperson said.
"When the shootout ended, six of the terrorists were dead and the rest had fled," the spokesperson was quoted as saying by 'Dawn'.
The bodies were taken to a hospital to identify the slain terrorists.
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Separately, the police launched a combing operation in the area to arrest the escaped suspects.
The CTD's investigation team had identified one of the deceased as Haji Muhammad alias Pathan, who was accused of being involved in the abduction of Shahbaz Taseer, son of the late governor Salmaan Taseer, a senior police official was quoted as saying.
He said Pathan had been declared a proclaimed offender and his name was listed in the Red Book (a list of most wanted militants).
An FIR against Pathan was registered with the Gulberg police in Lahore.
The official said that Pathan belonged to two banned organisations - TTP and the Islamic Movement of Uzbekistan.
"Efforts are under way to identify the remaining five terrorists," the official said.
Shahbaz was kidnapped near his company's head office in Gulberg on August 26, 2011. He was released earlier this year.
His father Salmaan Taseer was killed in 2011 for criticising the blasphemy laws.