PESHAWAR, Dec 3: Two militants were killed and four others wounded in a gun battle with police after robbing a bank in a remote village in Swat on Friday.

Officials said that six others were arrested after hours of gunfire overnight that lasted till Friday afternoon, officials said.

All the dead and wounded, including those who were arrested, belonged to the banned militant outfit, Jaish-i-Muhammad, officials said. Fourteen armed men had broken into a local branch of the National Bank of Pakistan in Matta, Swat on Thursday and looted Rs2.6 million.

A passer by was killed and two others were wounded when the fleeing militants opened fire on the chasing police. "This is a dangerous new phenomenon ... the militants are (now) resorting to bank robberies. This means that their sources of funding are drying up and they are resorting to other means to finance their activities," said a security official.

Official sources said that police finally cornered them in the remote village. Personnel of the Anti-Terrorist Squad from Peshawar were also rushed to the area and took part in the action, officials said.

"They were asked to surrender and two of them did give up, but others refused to lay down arms and turn themselves in," a security official said. He said two militants were killed in the ensuing battle, adding that among the six arrested men, four were wounded.

The captured also included leader of the militant group who told interrogators he had trained in Afghanistan and belonged to the banned Jaish-i-Muhammad.