
The men, who police said were members of Lashkar-e-Jhangvi (LeJ), a banned extremist group, were allegedly planning to attack a Shia gathering on Friday.
Ashura processions have been targeted in the past and security has been beefed up across the country in preparation.
"We carried out an operation against the terrorists on an intelligence tip-off," Chaudhry Mohammad Aslam, who led the raiding team, told AFP.
A fierce gun battle broke out during the raid in Maripur town in Karachi, in which three officers were wounded and six suspected militants were killed, he said.
LeJ has claimed numerous deadly attacks on Shias, who make up around 20 percent of the 180 million population, including two devastating bombings in Quetta at the start of the year.
Police said the LeJ were plotting to attack the grand congregation of Shias in Karachi.
They said the raid recovered suicide vests, hand grenades, detonators, remote control devices and a car bomb, besides two motorcycles.
The shootout came after a series of small bomb attacks late on Wednesday targeting Shias in Karachi, which injured at least seven people.
Besides deploying contingents of army and paramilitary security forces, cell phone networks have been shut down in some cities to prevent remote-controlled bomb attacks.
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