Nine suspected terrorists were killed in an 'encounter' with the Counter-Terrorism Department (CTD) Sheikhupura early Wednesday, a CTD statement said.

The CTD received information that a cell of 13-14 'Al Qaeda terrorists' was hiding in Sheikhupura to "launch attacks on police personnel and offices of sensitive agencies in and around Lahore," the statement said.

The CTD raided a place in Kheroki Malian at about 1am to arrest the suspects. At the site of the raid, the CTD challenged the 'terrorists' to surrender.

"In response, the terrorists started firing at CTD officials and divided them into 2-3 small groups. The CTD team took cover and retaliated in self defence. When the firing stopped, nine terrorists were found dead killed by firing of own accomplices, whereas 4-5 succeeded in fleeing from the scene in darkness," the CTD statement claimed.

The CTD recovered 6 kilograms of explosive material, prima cord, four Kalashnikov rifles, five pistols, five motorcycles, and bullets from the scene.

An investigation was launched to track down the absconding 'terrorists' and a case is being registered in the CTD police station, the statement said.