The gunmen, dressed in police uniforms, stormed the Badaber air base on Friday morning, BBC reported quoting Major General Asim Bajwa said.

Sixteen of the victims were killed during morning prayers at a mosque inside the compound, Gen Bajwa added. The other victim was an army officer.

The Pakistani Taliban said they ordered the attack. Peshawar has frequently been targeted by militants.

Gen Bajwa said the militants entered the base, which is 10km (6 miles) south of Peshawar, at two points and then split into groups.

A rapid response force was dispatched to the scene and contained the attackers around a guard room, he added. Thirteen militants were said to have been killed by security forces, although the Taliban said just one of their fighters died. The total number of gunmen involved is unclear, but Gen Bajwa said his forces were hunting for the remaining attackers.

Reports say about 20 people, including 10 soldiers, were injured in the exchange of fire.

The attack on Badaber air base is the first on a military target since a Pakistan navy ship was attacked in Karachi's dockyard in September last year. It is the bloodiest since last December's massacre of 150 pupils and teachers at Peshawar's Army Public School.

The air base - which is essentially a residential complex rather than an operational one - is located on the southern-most tip of Peshawar's administrative limits. It is surrounded by tribal territory, which has been the hub of criminal and militant activity until recently.

The attack comes amid claims of success by the military in its 15-month operation in the tribal region, and may well be an attempt by militants to show they can still hit hard targets.

It also exposes holes in Pakistan's pre-emptive intelligence gathering mechanisms, mainly due to lack of co-ordination and information sharing among various security agencies.

In an email, Pakistani Taliban spokesman Muhammad Khurasani said a "suicidal unit" had carried out the attack.

An unnamed military official told the Reuters news agency that the militants had "explosives-laden jackets and were armed with hand-propelled grenades, mortars, AK-47 rifles". It is so far unknown if the militants had any insider support, as has been the case in previous attacks.

Pakistan's Prime Minister Nawaz Sharif condemned the attack, saying: "Terrorists will be rooted out from the country."