The leader, named as "Sajjad" alias Kargil, was said to be a Bangladeshi who moved to Pakistan in 2009 and specialised in making IEDs and suicide jackets.
"The Crime Investigation Department (CID) of the police raided a house in Qayyumabad neighbourhood in the eastern part of Karachi where the suspects were plotting a terrorist attack," a local police official told AFP on condition of anonymity.
He added Sajjad was the Karachi commander of Al-Qaeda in South Asia, a new branch of the global militant outfit that was officially launched last September, along with three others.
Umar Khatab, a senior police official of the CID, confirmed the incident.
"Sajjad came from Bangladesh to Pakistan in 2009 and lived in Waziristan where he swore allegiance to Asim Umar, the Pakistan chief of AQIS," Khatab told AFP.
He said the police recovered ammunition, weapon and a suicide jacket from the house after the shootout.
It was not immediately possible to confirm the details of the event with independent witnesses from the neighbourhood.
Rights activists say suspected militants who are captured are often killed in staged encounters by security forces.
Pakistan has upped the ante against the Taliban and Al-Qaeda linked militants after a December 16 attack on a military-run school in the northwestern city of Peshawar.
The countrys deadliest terror attack killed 150 people, 134 of whom were schoolchildren.
Pakistani officials have said they plan to hang 500 convicts in coming weeks, drawing protest from international human rights campaigners.
Last week, Pakistan parliamentarians approved a law for establishment of military court for terror-related cases for speedy justice.
Editor: Priyambodo RH
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