Fighting at police academy
Security forces are battling to retake a police academy in eastern Pakistan after a group of gunmen attacked it with grenades and assault rifles.
A senior Pakistani official told the BBC that 40 people had been killed and 80 injured in the attack on the outskirts of Lahore.
But amid the confusion, other officials have given lower figures.
Firing was continuing more than seven hours after it began with about 30-40 people thought to be trapped inside.
The attack comes less than a month after gunmen attacked the Sri Lankan cricket team in Lahore.
Officials said they had arrested two suspects carrying explosives
In that attack, six policemen were killed, while up to 14 gunmen escaped.
Pakistani officials say it is too early to say who is responsible for Monday's assault in Lahore.
Escalating militant violence in Pakistan has been concentrated in the country's north-west near the border with Afghanistan.
But insurgents have increasingly targeted big cities in recent months.
The Lahore academy has been named by local media as the Manawan police training school. It is on the outskirts of the city, on a road to the border with India.
Latest from Jill McGivering, outside the academy, Lahore
I am on a rooftop quite close to the compound with a lot of people who have gathered to watch.
There does seem to have been an intensification in the fighting around the compound.
We saw helicopters circling low and firing into the compound and then there was a series of explosions - I counted at least four within a few minutes.
We can hear quite a lot of gunfire inside the compound. One of the hostages who emerged said he was the son of a police officer. He was tearful but uninjured.
One official said the gunmen had attacked from four sides. Another said they had thrown grenades before starting to fire.
Several hundred trainees were said to be inside when they struck.
Hours later, 30-40 hostages were thought to remain trapped as elite troops battled militants holed up there.
Some 10-12 gunmen carried out the attack, officials said. They said they had arrested two men carrying explosives and communications equipment.
It was not immediately clear whether the men had been inside the compound.
TV footage showed a slim bearded man in bloodstained clothes being dragged off by plainclothes security personnel.
Security forces blew up sections of the compound wall to get better access.
The BBC's Jill McGivering, in Lahore, said that some hours into the attack there were a series of explosions as security forces apparently tried to force their way into the main building.
Helicopters were sweeping low over the compound, she said, as they tried to move the battle into a final, critical stage.
At one point, several hostages were seen coming out.
'Dressed as police'
The scene is chaotic, our correspondent says, with roads around the site clogged with vehicles and people.
MAJOR PAKISTAN ATTACKS
27 March 09: Suicide bomber demolishes crowded mosque near the north-western town of Jamrud, killing dozens.
3 March 09: Six policemen and a driver killed, and several cricketers injured, in ambush on Sri Lanka cricket team in central Lahore
20 Sept 08: 54 die in an attack on the Marriott hotel in Islamabad
6 Sept 08: Suicide car bombing kills 35 and wounds 80 at a police checkpoint in Peshawar
Aug 08: Twin suicide bombings at gates of a weapons factory in town of Wah leave 67 dead
March 08: Suicide bombs hit police headquarters and suburban house in Lahore, killing 24
Dec 07: Former PM Benazir Bhutto assassinated along with 20 others at a Rawalpindi rally
Officials and witnesses said the gunmen had entered the academy dressed in police uniform, adding to the confusion.
One police constable told reporters: "We were exercising in the training ground inside the compound when we heard a blast.
"A great cloud of dust blew over us and I felt something hit my face," he said.
"When I touched my face there was blood all over. Then I saw a man firing a Kalashnikov running towards us.
"He had a beard and his face was partially covered by a bandanna. Three of my colleagues fell down in the burst of firing. I just turned and ran."
TV footage showed several police officers lying motionless on the ground inside the school.
Reports gave varying death tolls.
Police official Ali Nawaz told The Associated Press that at least 11 people had died.
As many as 70 people were injured.