Abdul Aziz, who was seized on Wednesday trying to flee the complex in a woman's burqa, said in a bizarre television interview wearing one of the garments that about 1,000 male and female students remained in the building.

The pro-Taliban mosque has been under siege by troops and police since Tuesday when fierce street battles between its hardline devotees and security forces left at least 16 people dead.

"After coming out I saw the siege was massive and came to the conclusion that we should give up," he told state television. "The government has massive resources and I realised that people will not be able to stay inside for long."

Aziz appeared in a black burqa under which his grey beard was partly visible. The interviewer asked him to take off the veil, which he then lifted to show his face.

"I have told them not to sacrifice their lives for me," he said.

President Pervez Musharraf's government, which has been under pressure to crack down on the mosque's Taliban-style vigilante activities, hailed Aziz's arrest as a major coup.

But security forces were still trying to dislodge his brother Abdul Rashid Ghazi and a diehard core of militants allegedly stopping people from surrendering.

Helicopter gunships again circled around the mosque as tension mounted.

"There are up to 30 armed terrorists holed up inside the mosque who do not want to come out and are preventing others from leaving the premises," religious affairs minister Ijaz-ul Haq told state television.

The extremists were "using women and children as human shields," added Islamabad administration chief Khalid Pervez said.

Ghazi and Aziz have both denied that students are being kept against their will.

The mosque has two schools for male and female students attached to its compound in a leafy Islamabad neighbourhood and officials. Students range in age from pre-teens to their early 20s.

At least 50 students left the mosque on Thursday and were herded on to buses by police, but it was a trickle compared with Wednesday's exodus when about 1,200 fled.

The government announced a two-hour break in a shoot-on-sight curfew imposed on Wednesday on the block where the mosque is located -- but said it did not apply to the area immediately around the complex.

Security forces stepped up the pressure just before dawn by setting off detonating seven deafening "warning" blasts and smashing down one of its doors with an armoured personnel carrier.

The students hurled several grenades and opened fire in return. There were no casualties.

State television said the students were being told over loudspeakers to lay down their arms "or you will be responsible for any losses."

The "rotten" body of a student killed in earlier clashes was brought out of the mosque Thursday and more were believed to be inside, a doctor at the state-run Pakistan Institute of Medical Sciences told AFP.

Ghazi, the deputy leader of the mosque, earlier reiterated his refusal to surrender. He said that 2,000 male and female followers were still with him and that morale was high.

"We are not terrorists, so why should we lay down our arms?" Ghazi said. He added that he wanted an "honourable solution to the problem."

Musharraf, who is already facing a political crisis ahead of elections later this year after ousting the country's chief justice, ordered the crackdown after the mosque tried to set up a Taliban-style justice system.

The mosque's freelance morality campaign in Islamabad included the abduction of police officers and people accused of running brothels -- including seven Chinese -- as well as raids on music and DVD shops.

Friction with the Red Mosque began in January when its female students took over a government-run children's library. In April the clerics set up an Islamic court that issued a "fatwa" or religious decree against a paragliding female minister.