The Pakistani cleric leading militants holed up in a besieged mosque in the heart of Islamabad has said he would rather die than surrender to government forces, dealing a defiant blow to hopes of a peaceful end to the siege.

Abdul Rashid Ghazi, the deputy cleric of the Lal Masjid, or Red Mosque, today rejected calls by President Pervez Musharraf’s administration for an unconditional surrender, saying he and his following of radical students were ready for martyrdom.

An end to the three-day crisis had appeared to be imminent last night after Mr Ghazi said his supporters would lay down their weapons in return for amnesty. But the government rejected the offer on the grounds that demands of safe passage were unacceptable, insisting the cleric release women and children being held.

“We have decided that we can be martyred but we will not surrender,” Mr Ghazi told a Pakistani television channel. “We are ready for our heads to be cut off but we will not bow to them. This may be my last conversation with you."

In a further indication that the standoff was far from being resolved, armed troops continued to hit the complex with heavy gunfire and explosives. Since Tuesday, at least 19 people have already been killed in the clashes, and government troops – backed by armoured personnel carriers and helicopter gunships – have been moving closer to the mosque, having destroyed much of its surrounding walls.

There is no turning back. It has to be taken to its logical end,” said Javed Cheema, an Interior Ministry spokesman.

An official from the mosque claimed that further casualties had been caused by today’s gunbattles, and that the building had been hit by further mortar fire from security forces. Hundreds of Islamic students are still inside the compound, along with up to 60 die-hard militants, said to have been schooled in guerrilla warfare at mountain training camps in Kashmir and Afghanistan and who are believed to be equipped with assault rifles, grenades and petrol bombs.

Keen to avoid further damage to his administration, General Musharraf earlier ordered that no military action should be taken until women and children were out of the mosque, amid claims that human shields were being held inside, and authorities have insisted they would not storm the complex until then. Mr Ghazi and his brother Maulana Abdul Aziz – the chief cleric of the mosque, who was captured on Wednesday - have both denied that anyone was being kept against their will.

“For the Pakistan army to go in is no problem, but safety is our foremost objective,” said Tariq Azim, a government spokesman. “We don’t want to harm any innocent lives. We already know that these people are being kept as hostages.”

Today as the violence continued, dozens of parents waited anxiously behind security barriers near the mosque, with about ten allowed to approach the shrine’s entrance. During lulls in the fighting, some parents have approached the complex, handed notes to those inside with the names of their children, who have then emerged. More than 1,000 have fled the complex, most of them young male and female students at the mosque’s seminaries.

Mr Aziz, who was seized as he tried to slip through the military cordon dressed in a burka and high heels, has urged his followers to give themselves up. In an interview with state television Mr Aziz - still dressed in the burka – said that 850 students remained inside. However, Mr Ghazi later insisted the number was 1,900 – a claim which officials could not corroborate.

The violence erupted on Tuesday in the form of deadly street clashes, after months of tension between Pakistan’s US-backed government and mosque’s followers - who have sought to impose Taliban-style rule in the city. Since January, Mr Aziz and his students have led an increasingly aggressive vigilante campaign in the capital, protesting against so-called immoral conduct by kidnapping alleged prostitutes and police officers, and carrying out raids on music and DVD shops.

Key to the campaign is said to be Umme Hassan, the wife of Mr Aziz, whom many regard as more radical than her husband, and who mobilised hundreds of young women who formed the nucleus of the Red Mosque’s movement for enforcement of Sharia. The burka-clad, stick-wielding women known as the Hafza Brigade, had assumed the role of a self-styled vice squad, raiding houses and dragging out women alleged to be involved in prostitution.

They are alleged to have kidnapped seven Chinese nationals who they accused of running a brothel from an acupuncture clinic. They were also seen stopping women and reprimanding them for not covering themselves with Islamic headscarves.

General Musharraf’s authority has been weakened by the spread of militant Islam from tribal areas. His decision to sack the country’s chief justice, who is believed to have opposed constitutional changes proposed by General Musharraf, heightened the political crisis ahead of elections later this year.

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