Islamabad  - Four soldiers and eight insurgents were killed on Wednesday in continuing clashes between the military and Islamist militants in north-western Pakistan near the Afghan border, officials said.

Government troops killed at least eight rebels in intense gunfights in the restive valley of Swat where security forces are battling followers of radical cleric Maulana Fazlullah for over a year.

Clashes erupted when heavily-armed men targeted soldiers in Kabal area, a stronghold of Fazlullah.

"Retaliatory fire killed eight militants while one soldier was martyred," a security official said. The fighting also wounded some combatants, but their numbers were not available.

Swat used to be a tourist haven until last year when authorities moved thousands of troops in to the mountain district to quell a so-called Islamic rebellion under which hard-liners tried to impose Taliban-style laws in the region.

The military action triggered a wave of attacks, mostly suicide bombings, on security forces and liberal politicians belonging to the ruling party in the North West Frontier Province (NWFP), of which Swat is a district.

The latest strike came in Shabqadar, a town bordering the militant-infested Mohmand tribal district, when a suicide car bomber attacked a temporary military camp on Wednesday, killing three soldiers and wounding at least four others, according to a military spokesman.

"It was a vehicle-borne attack in which the bomber struck a cordon at the military camp. Three security personnel embraced martyrdom," the spokesman said.

The camp was set up in a vacant government school building and it was being used by the army and paramilitary troops.

No group immediately claimed responsibility for the attack.

The bombing took place as security personnel reportedly arrested at least five suspects in Shabqadar for allegedly hijacking and looting 13 trucks carrying food supplies and two Humvee vehicles for international troops in Afghanistan.

Dozens of masked men intercepted the convoy on Monday in the nearby Khyber tribal district which is a vital supply route for the US-led forces in landlocked Afghanistan.

Recent news reports also said that government forces are strengthening their presence in Mohmand and its adjacent areas in a possible move to launch a military operation against al-Qaeda and Taliban militants believed to be holed up in the restive region.

Militant violence has increased in Pakistan's north-west following a surge in US air strikes on suspected Taliban militants in the tribal belt and offensives launched by the government forces to clear the areas of insurgents.

On Wednesday, gunmen shot dead a US aid worker and his driver in an upmarket neighbourhood of Peshawar, the capital of NWFP.

A police officer on condition of anonymity said the US citizen was working for FATA Development Programme, which is being run by the United States Agency for International Development in Pakistan's seven tribal districts and six other frontier regions.

Wes Robertson, a spokesman for the US embassy in Islamabad, confirmed that "an American citizen and his Pakistani driver was killed in the attack." Robertson, however, did not give details of the US national's identity.

The deadly strike follows an August 26 gun attack on the US consulate's principal officer, Lynne Tracy, in the same locality. Tracy escaped the attack unhurt as she was travelling in an armoured vehicle. (dpa)