Up to 1,500 pro-Taleban extremists holed up in Islamabad's largest mosque were refusing to surrender to government troops massing around them today, despite the chief cleric being caught trying to escape dressed as a woman.

As troops loyal to the Pakistani President demanded that all those inside Islamabad's Red Mosque give themselves up, the mosque's head, Maulana Abdul Aziz, was discovered sneaking out dressed in a burka, and was arrested by soldiers.

However despite the his capture - and the surrender of around 750 others so far today - as many as 1,500 hardliners were still resolutely refusing to come out, including Mr Aziz's militant brother Abdul Rashid Ghazi.

Uniquely, many of those inside are believed to be young women affiliated to the mosque's radical madrassa.

After clashes outside the mosque killed 16 people yesterday, troops in armoured personnel carriers today warned that they would operate a shoot-on-sight policy for anyone emerging with a weapon. Militants inside the mosque have repeatedly threatened that any troops confronting them will face a wave of suicide bomb attacks.

The battle at the mosque - situated only a mile and a half from General Pervez Musharraf's Presidential compound - is viewed by Pakistan's fragile pro-Western Government as a crucial stand against an explosion of Islamist extremism in the country's capital over the last year.

Preachers inside the mosque - commonly known by its Arabic name of Lal Masjid - have called for the imposition of strict Taleban-style rule in Pakistan and an end to the pro-Western policies of General Musharraf's Government, which is backed by the United States.

The calls of its radical imams, the stockpiling of weapons within the mosque, and a sharp increase in fundamentalist madrassas all around the capital, have been the source of alarm for General Musharraf.

This morning, a combination of women in black burqas and bearded young men streamed out of the compound and passed through metal detectors to give themselves up, but hundreds more stayed inside.

As well as threatening brute force, the Government is attempting to coerce the extremists to stand down by promising financial rewards of 5,000 rupees (£41) for every person who withdraws from the mosque, The Times has been told. This is regarded as a considerable sum for the extremists, many of whom come from some of the city's poorest families.

Some of the women who surrendered were picked up by their parents. Speaking to The Times, several parents said that they had sent their children to the madrassa to learn, not to become involved in a potentially deadly ideological standoff with the Government.

Later, security forces also confirmed the capture of Mr Aziz after the random inspection of women in burkas who were leaving the compound to surrender. As soldiers searched them, they discovered Mr Aziz and arrested him, security forces confirmed.

As the standoff intensified today, troops ordered a shutdown on all local businesses and a curfew for people living nearby, as all streets surrounding the mosque were closed off by the Government.

As troops in armoured personnel carriers trained their weapons on the building, a loudspeaker blared verses from the Koran from within the mosque, and issued messages of defiance.

Pakistani Government officials maintained that they expected more surrenders from the radicals to be forthcoming today. "We expect most of the women and about 300 more men will come out, then only the hardcore will be left inside. Our estimate is the militant element is only a couple of hundred," a senior security official told the AFP agency.

He said that those holding out were believed to include Taleban insurgents from the tribal areas bordering Afghanistan, and sectarian jihadis belonging to banned Pakistani groups.

Pakistani troops patrolling the country's largely lawless tribal areas bordering Afghanistan have faced escalating attacks by insurgents in recent weeks as Islamist sentiment has increased, and today it was reported that eight more soldiers had been killed in a fresh bombing attack.

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