Up to 1,200 pro-Taleban militants holed up without water and electricity in Islamabad's biggest mosque appeared close to surrender tonight.

Pakistani Army troops have been laying siege to their compound all day firing mortar shells, blowing holes in the mosque's perimeter walls and taking fresh casualties.

As the extremists breached a series of government deadlines to surrender, soldiers ringing the Red Mosque kicked off a day-long offensive by rigging up one of its compound's outer walls, including the front gate, with explosives and blowing it up.

Troops then spent the day pounding the mosque's fighters with gunfire and mortars, causing extensive damage and leaving plumes of black smoke billowing out of the building.

Reports suggested that around 20 Islamist fighters had been seen lying dead or injured inside the compound.

The attacks have also threatened around 800 young women students from its madrassa believed to be still inside and this afternoon the cleric leading the resistance attempted to negotiate terms of surrender.

Abdul Rashid Ghazi - whose brother Abdul Aziz was caught sneaking out of the compound in a burka and high heels yesterday - said he would give up his arms and stand down if he was allowed to stay on the premises with his sick mother and not be arrested.

He added that he would be willing to give up the mosque and hand its affiliated madrassa over to Government control. Troops rejected his demands, however, saying he should give up unconditionally.

"I am making this offer to save the lives of the students," he told the private Geo television station from inside the compound. "I want to stay in one of the houses behind in the mosque compound with my mother who is sick and with the wife of my brother until I get an alternate place to move to."

Tariz Azeem, the Pakistani Deputy Information Minister, immediately dismissed the offer, and accused him of holding the madrassa's women hostage and using them as bargaining chips.

"The time for rhetoric is over, it is time for action," Mr Azeem said. "Instead of issuing statements he should come out with the women and children he is using as shields, hand over all the weapons, and bring it to a decent closure.

"He is a wanted man, he is a declared absconder. It will be up to the court to decide his future."

Followers of the mosque - situated less than two miles from the Presidential compound of General Pervez Musharraf - are wanted by the Pakistani Government after calling for the imposition of Taleban-style rule in Pakistan and the overthrow of the country's pro-Western Government. They have also been accused plotting terrorist attacks, stockpiling weapons and kidnapping several Chinese residents of Islamabad.

Mr Ghazi's attempt at surrender came shortly after his brother Abdul Aziz also said the rebels should stand down. He appeared in court today after being caught trying to escape yesterday.

"After coming out, I saw the siege was massive and came to the conclusion that we should give up," Mr Aziz told Pakistani state television shortly before his court appearance in Rawalpindi. "I have told them not to sacrifice their lives for me."

Meanwhile, as the battle between rebels and the Government intensified, desperate relatives of the women inside the mosque pleaded with troops not to launch a full-scale invasion and to extend their deadline for the extremists to surrender.

The relatives waiting at the perimeter said they had come to pick the women up from the mosque, known in Arabic as Lal Masjid. However, some of those in the madrassa are believed to have refused their demands to come out, while militants are thought to be coercing others to stay

Today, Pakistani officials said that Gordon Brown had telephoned General Musharraf to offer his support to the embattled Pakistani President, in what was the first contact between the pair since he took over from Tony Blair.

"The British Prime Minister appreciated President Musharraf’s key role in the fight against militancy and terrorism and promised to maintain close ties between the two countries," one official was quoted as telling the AFP news agency.

The Pakistani Government regards its battle for the Red Mosque as a focal point of its struggle against a rising tide of pro-Taleban extremism, which over the last year has spread beyond its base in the country's lawless tribal areas and to the heart of its capital.

The number of madrassas in the city has mushroomed over the last year while an increasing number of clerics have attacked the Government's alliance with President Bush and the European Union and demanded the imposition of a strict Islamic state.

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