Hardcore Islamic students holed up in a mosque in Pakistan's capital early on Friday fired several rockets at the security forces after their offer for conditional surrender was dismissed by the government, officials claimed.
"We have received these reports that they have started to use rocket launchers and explosive device against the security forces," Information Minister Mohammed Ali Durrani told Geo news channel.
He said one rocket damaged an armoured personnel carrier, but there was no causality reported.
However, the hard-line deputy chief of the Lal Masjid, Abdul Rashid Ghazi rejected the allegations.
"We do not have any rocket launchers," he said.
Heavy fire was being exchanged at the besieged mosque and the militants hurled several hand grenades, said an eyewitness.
Ghazi offered to surrender late on Thursday in return for safe passage following heavy shelling by military and paramilitary troops.
"Those who give themselves in should not be arrested," Ghazi told Aaj news as the security forces allowed the ambulances to escort dead and injured from the mosque to the hospitals during a short ceasefire.
The government dismissed the offer and ordered him to surrender unconditionally.
"The demand for safe passage cannot be accepted, he has to surrender unconditionally" Interior Minister Aftab Sherpao told Geo news channel.
Authorities charged the hardcore elements in the mosque were using women and children as human shields.
"Ghazi is holding some women and children in a basement at the mosque," Interior Minister Aftab Ahmed Shepao said. But the allegation was denied by the radical cleric.
However, only a couple of dozens gave themselves in to the authorities, as compared to more than 1,000 surrenders on Thursday.
Members of the 12,000-strong security force, taking part in what has been named Operation Silence, fired several rocket-propelled grenade (RPG) rounds at the Lal Masjid, leaving the compound blanketed in smoke.
"Resistance from the militants is very strong. They are using sophisticated guns and hand grenades," a commander of the Rangers paramilitary force Colonel Ali said on Thursday.
The militants, some of them believed to have been trained by the Taliban and Al Qaeda, tried to target one of the three gunship helicopters hovering over the compound housing the mosque.
Exact numbers of casualties over the four-day long standoff are not yet known. Authorities were confirming 19 deaths, including two soldiers and one journalist, but witnesses and independent observers believe the death toll may rise to several dozen.
More than 200 people were said to be injured, many with bullet wounds.
Earlier, the chief cleric and elder brother of Ghazi, Maulana Abdul Aziz, advised the students to surrender after he was arrested Wednesday evening in a bid to flee disguised as a veiled woman.
The battle outside the Lal Masjid began Tuesday morning when stick-wielding students attacked a police checkpoint near their seminary.
But tensions were brewing since February when Red Mosque students tried to impose a "Taliban-style" strict Islamic way of life on the residents of Islamabad, and abducted several women over allegations that they were involved in prostitution.
The students had also issued warnings to the owners of audio and video stores to stop selling "un-Islamic" goods and had ordered women not to drive.