An anti-terrorism operation in Peshawar's Hayatabad area concluded Tuesday afternoon after a 17-hour standoff, with five suspected terrorists killed and a policeman martyred.

The suspects had taken cover in a residential building in Phase 7 of the Hayatabad locality, from where they attacked security forces.

Peshawar city police chief Qazi Jameel told the media that one of the suspects had been killed last night, whereas the rest of the four were neutralised today.

"The Special Services Group and police personnel participated in the operation. Two of them were injured during today's action," Jameel said.

The sole policeman martyred in the operation had lost his life last night.

AIG Shafqat Malik revealed that 50 kilogrammes of explosive material was found installed in a bike and parts of the building. The building was demolished with explosives soon after the operation concluded.

AIG Malik said that the operation was concluded after a deliberate delay, which he said was meant to ensure the safety of people residing in the area.

He said that the suspects had offered stiff resistance throughout the night.

The holdouts were neutralised as security forces breached the walls and stormed the building in their final push.

Peshawar Corps Commander Lt Gen Shaheen Mazhar Mahmood had visited the site of the anti-terrorist operation on Tuesday morning.

During his visit, Lt Gen Mahmood had directed security officials to adopt all possible precautions to ensure the security of the area's affected residents.

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Residents living around the said house were evacuated with the help of security personnel and rescue forces. Two injured women from the area were also shifted to the Hayatabad Medical Complex for treatment.

Elsewhere, funeral prayers for the martyred policeman, Qamar Alam, were offered in Malik Saad Shaheed Police Lines in Peshawar.

KP Chief Minister Mahmood Khan, Lt Gen Mahmood, KP Inspector General of Police Mohammad Naeem and other officials participated in the prayers.

CM Khan, while talking to the media, said that police had launched the operation on a tip off that suspected terrorists were hiding in a house in the Hayatabad area. He said, citing initial reports, that seven terrorists had been hiding in the house.

A local resident told our correspondent that cross firing had started in the midst of a search operation launched by police in the area.

"This area was considered peaceful, but the recent incident has proved it otherwise," the person said.

Talking about the suspects, the eyewitness said, "The people [suspected terrorists] had been living in the house on a rental basis for almost 15 days. They seemed to be from the rural areas from their appearance. All of them were middle-aged men and there were no women with them. They used to enter and exit the building using the basement door only."

Additional reporting by Zahid Imdad and Sirajuddin.