Taliban gunmen stormed a Pakistani police station on Monday, sparking gunbattles in the northwestern town of Bannu near the militant stronghold of North Waziristan, officials said.
Militants threw hand grenades at the entrance to the building used by police intelligence before opening fire, district police chief Waqar Ahmed said.
"About five to seven militants have stormed an old police station building which is now being used by officials from special branch," Ahmed said.
"An exchange of fire is continuing," he added.
Gulab Niaz said by telephone from inside the building that he and two colleagues had locked themselves in a room as the shootout unfolded outside.
Two wounded policemen were evacuated to hospital, where one died of his injuries, police official Nisar Ahmed said.
Local residents were being evacuated, shops have closed and a curfew imposed in the city, 150 miles (240 kilometres) southwest from the capital Islamabad, police said.
Pakistani Taliban spokesman Ehsanullah Ehsan claimed responsibility for the assault in a telephone call. The group has waged an insurgency in the northwest that has killed thousands of people since July 2007.
Bannu lies close to Pakistan's semi-autonomous tribal district of North Waziristan, the most infamous militant bastion on the Afghan border that US officials say is used a launchpad for attacks in Afghanistan.