Pakistani paramilitary troops take position during heavy gunbattle with militants at Lal masjid, or Red Mosque, 10 July 2007

Huge explosions rocked Islamabad's Red Mosque early Tuesday morning as security forces blasted their way into the heavily armed compound.

By mid-morning officials said more than two-thirds of the sprawling complex had been cleared. Heavy combat continued as around 50 to 60 militants remained barricaded inside a basement.

Military spokesman Major-General Waheed Arshad says the gunmen were fully prepared and mounted a strong resistance.

"Militants were using all kinds of weapons," he said. "They had machine guns, they had rocket launchers, they were using hand grenades."

He says at least 40 militants and three security personnel have been killed.

Fifty other people have surrendered.

Arshaid said around 20 children managed to escape early Tuesday but said hundreds more may still be trapped inside the mosque.

Ambulances ferried scores of wounded to nearby hospitals, while the terrified parents of students trapped inside waited for the siege to end.

The mosque's fiery, pro-Taleban cleric, Abdul Rashid Ghazi, has said he and his supporters would rather die than surrender. He has said he hoped his death would spark a nationwide Islamic revolution in Pakistan.

The assault came just hours after government negotiators said they failed to end the seven-day standoff.

Lal Masjid, or the Red Mosque, has been a well-known source of Islamic militancy and its top clerics recently vowed to impose strict Islamic law on the capital.

Ghazi's supporters led what they called an anti-vice campaign in the city, which included kidnapping police officers and a number of alleged prostitutes from China.

There are mounting concerns the capital's unrest could spark a much wider militant backlash in other parts of the country.