PESHAWAR: Islamic militants armed with rocket launchers took around 250 children hostage at a school in northwest Pakistan on Monday following a shoot-out with police, officials said.

Police had surrounded the school in the remote village of Domail while tribal elders were negotiating with the militants, who have demanded safe passage in return for freeing the captives, they said.

The school, whose pupils are mostly aged between eight and 12, is near the northwestern border with Afghanistan, where Pakistani forces have been locked in fierce fighting with Al-Qaida and Taliban militants.

"About seven terrorists have taken the school children hostage. There about 200 to 250 children," Interior Minister Hamid Nawaz said.

"The terrorists are demanding safe passage, the provincial government is in negotiations with them. We hope that the matter will be resolved peacefully," he added.

The incident comes amid a tide of violence in Pakistan since the assassination of former premier Benazir Bhutto that has raised fears for the country's stability ahead of key elections on February 18.

Militants holed up at the school, about 250 kilometres (155 miles) west of Islamabad, after they abducted a health worker in the village and drove off with him, police said.

Police gave chase and in the ensuing shoot-out one militant was killed and a policeman was wounded, while the medic escaped, senior local police official Shakirullah, who goes by one name, said.

"They have taken the school children hostage, we don't know how many but we think it is in dozens," Shakirullah added. "Officials are on the spot and conducting negotiations."

District police chief Dar Ali Khattak said the militants "have all types of weapons like rocket launchers and grenades."

The army was ready to help them but had not yet been called in, he said. "We have been told by local people there are more than 250 children. Negotiations are underway to secure their peaceful release," he added.

Militants in northwest Pakistan have increasingly resorted to kidnappings and hostage-takings to press their demands for Islamic Sharia law and an end to military operations in the region.

Pakistani forces on Sunday said they had seized control from the militants of a key road tunnel that links the district where the school is located to the main northwestern city of Peshawar.

But a soldier died in fierce fighting that continued on Monday in the nearby tribal area of South Waziristan, where Pakistani officials say the key suspect in the murder of opposition leader Bhutto is hiding out.

Islamist warlord Baitullah Meshud denies any involvement in her killing but fighting in his mountainous fiefdom has escalated since the killing of Bhutto on December 27.

NEW DELHI: Drawn by the facility offered by the web and the diversity of products available on it, Indian netizens have emerged as the third biggest credit card users globally for online purchasing, next only to the Turkish and Irish e-shoppers.

According to a global online survey conducted by leading research firm Nielsen, more than 85 per cent of internet users in the world are purchasing goods or services online, while credit card has emerged as the most famous payment method for such purchases.

In the survey, as many as 84 per cent of online shoppers from India said they have used credit cards for such transactions, next only to 91 per cent in Turkey and 86 per cent in Ireland.

India shared the third position with the UAE, which also has 84 per cent of online buyers using a credit card.

"Shopping on the Internet with the ease of a credit card is especially appealing to consumers in emerging markets who simply cannot find or buy items they want in their retail trade. The Internet has opened up a whole new world of shopping for these consumers," Nielsen's US Customized Research Vice-President Bruce Paul said.

The survey found that credit cards are by far the most common method of payment for online purchases with 60 per cent of global online consumers having used their credit card for a recent online purchase. Among the various credit cards, more than half or about 53 per cent used a Visa card.

Globally, more than half of Internet users have made at least one purchase online in the past month.

Most popular purchased items over internet are books (41 per cent purchased in the past three months), followed by articles like clothing/accessories/shoes (36 per cent), videos / DVDs / games and airline tickets constituted about 24 per cent.