MARDAN, Feb 2: An eight-hour gunbattle between police and militants barricaded in a house left two policemen, two militants and a hostage dead in a village near here on Saturday.

Police laid siege to the house in Palo Dheri village after being tipped off that militants were holed up there.

The police asked them to turn themselves in, but the militants responded with a volley of shots.

A reply by the law enforcers led to a sustained exchange of gunfire, during which the militants occupied another house in the neighbourhood, making the family hostage.

Police said the militants used the hostage women and children as human shield.

A jirga of local elders held talks with the militants and secured the release of all hostages except Azam Khan, who was later killed in the shootout.

SHO Ashfaq, head constable Faizullah, militants Afsar Ali and Adnan also lost their lives. Two policemen and a woman were injured.

The deceased SHO was buried at Dobyan, in Swabi, and constable Faizullah in Lund Khawar area.

After arrival of reinforcement from Charsadda and Nowshera, police launched an attack, razing the building to the ground.

Assault rifles and hand grenades were used during the fierce fighting, police said. NWFP police chief Sharif Ahmed Virk told Dawn that the militants had sneaked into the area from Swat.

He said that two suicide jackets, eight hand grenades and a huge cache of arms and ammunition had been found in the debris of the building.

He said the government had announced a compensation of Rs2 million for the heirs of the deceased SHO and Rs1 million for the head constable. Rs500,000 would be paid to an injured ASP and Rs10,000 each to the personnel who had taken part in the operation.

The police chief said the names of the four personnel killed and injured in the battle had been recommended for gallantry awards, which would be in addition to the ‘Shuhada package’.

He called for an increase in the strength of police force in view of the growing militancy.

NWFP Governor Owais Ahmed Ghani and caretaker Chief Minister Shamsul Mulk praised the police for their “determination to fight the extremists”.

Police had arrested a militant after an exchange of fire in the same area two weeks ago. Militants had also fired rockets on the homes of some local political leaders recently.

A caretaker provincial minister had escaped an attack, but his police guard was injured.

Agencies add: Rebels hurled grenades and fired rockets at police after officers surrounded a house following intelligence reports that extremists with ties to local Taliban were hiding there.

An official said: “They (police) retrieved the bodies of militants and then dynamited the house.”