A huge explosion was heard outside the Lal Masjid in Pakistan capital Islamabad as security forces and radical Islamists of the mosque clashed.
People were seen running for safety after the sound of explosion was heard in the vicinity.
At least seven people were killed in the stand-off between the militant students and the security forces, a BBC report said.
Earlier in the day, after a six-month stand-off between the government and the radicals, the madrassa students holed up in the mosque exchanged fire with security forces deployed outside it.
A government spokesman alleged that the firing started after several madrassa students tried to barge into a building where the Rangers were lodged.
However, the mosque's administrator and militant cleric Abdul Rashid Ghazi alleged that violence erupted when Rangers moved close to the girls' madarassa and fired tear gas shells.
The cleric accused the government of starting the fighting and demanded the immediate withdrawal of about 1500 Rangers who surrounded the radical mosque on Friday.
The government has come under increasing pressure to act against the students and clerics who, last month, held seven Chinese captive in the mosque for 15 hours for indulging in 'un-Islamic' acts.
While emergency has been declared in all hospitals, the government has called for police reinforcements from nearby Rawalpindi city.
The firing started around 1300 hours and periodic gunfire has been heard from different sides of the mosque.
Madrassa students armed with sticks and Kalashnikov rifles rushed towards some of the pickets of the Rangers, who in turn fled.
The police have not cordoned off the boys madrassa, Jamia Faridia, located about less seven km from the mosque. The roads on the sides of the mosque in central Islamabad were open for over two hours after the firing began.
Also as firing started, Rangers were seen withdrawing into the nearby streets, while the heavily-armed students took the streets. Hundreds of students stood in front of the mosque, shouting slogans of jihad, while scores of onlookers and media persons gathered.
Later, police in fortified vehicles were seen moving in large numbers firing tear gas shells to disperse the students. Geo TV Bureau Chief Afsar Alam was also injured in the violence.
The students later attacked government offices while some students wearing gas masks were seen carrying rocket launchers on their shoulders to the pickets set up on the walls of the mosque.
Students were seen attacking the buildings of Ministry of Environment and National Safety Commission close to the mosque.
Meanwhile, repeated announcements have been made through loudspeakers in the mosque that 'jihad has been declared.'
The chief cleric, Maulana Abdul Aziz, was heard asking the 'suicide bombers' to take their positions.
Speeches are being delivered through loud speakers installed in the mosque accusing the government of starting the violence.
More than 50 injured women, believed to be madrassa students, were admitted to hospitals, reports from hospitals said.
Even in this grim situation, Ghazi insisted that girl students should be treated only by women doctors in the hospital.
Lal Masjid is located near Abpara Market and as the fighting started, all shops in the area downed their shutters fearing that a major operation may begin later in the day.
Though the fighting was confined to the area around the mosque, the Pakistani capital remained tense.
President Pervez Musharraf [Images] recently said students of the banned Jaish-e-Muhammad were holed up in the mosque and expressed apprehension that any raid would cause lot of bloodshed.
The clash was being covered live by most television channels including the state-run PTV.
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