ISLAMABAD, Pakistan (CNN) -- Pakistani forces Tuesday raided a controversial mosque where anti-government militants are holed up, and killed its radical Islamic cleric and more than 50 other people, Pakistani officials said.
Abdul Rashid Ghazi, cleric and rebel leader of the Red Mosque siege, was killed Tuesday, officials said.
Abdul Rashid Ghazi and "some of his men" died in an exchange of fire between Pakistani forces and militants holed up in the Lal Masjid, or Red Mosque, army spokesman Maj. Gen. Waheed Arshad said.
The mosque raid is ongoing and is expected to continue into the night, Arshad said.
Arshad said the militants are "very heavily armed."
Eight Pakistan commandos were killed in Tuesday's raid, which began in the predawn hours, he said.
Eighty-six people came out of the mosque's madrassa -- or Islamic school -- on Tuesday, including 27 women and three children who Arshad said were rescued "from the clutches of the militants." Watch Pakistani security forces making their final assault »
Gunfire and explosions erupted moments after an announcement from the government's chief negotiator that negotiations to end the standoff had failed.
The standoff came after a government investigation of the mosque's activities, whose students are demanding Taliban-style sharia, or Islamic law, be instituted in Islamabad.
"After 11 hours of negotiations, we are deeply disappointed that the talks did not succeed," former Prime Minister Chaudhry Shujaat Hussain said.
Ghazi said "no" to every offer from the government, according to Hussain. Ghazi and the militants with him refused to surrender, saying they would prefer martyrdom.
In an interview with CNN's Nic Robertson last year, Ghazi expressed his disdain for Pakistani President Pervez Musharraf, calling him "a dictator."
"He's an agent of the United States," Ghazi said in the September interview. "Although he says that Pakistan [is] first ... he doesn't mean it.
"He is doing all kind of ... things against the Pakistanis just to please America."
Ghazi's brother, Maulana Abdul Aziz -- the mosque's top cleric -- was captured Wednesday while trying to slip out of the Red Mosque disguised in a burqa -- the head-to-toe covering worn by some Muslim women.
Heavy black smoke rose above the mosque after the fighting started about 4 a.m. Tuesday (7 p.m. ET Monday).
Pakistani forces encountered heavy resistance from the students, who are seeking a Taliban-style rule in Islamabad, an army spokesman said. A weeklong standoff between Pakistani security forces and the students has left at least 86 people dead.
Tensions had been simmering for months between police and the students, who are blamed for a string of recent kidnappings of civilians, Chinese nationals and Pakistani police. The government has been investigating the activities of the mosque.
The violence began July 3 when about 150 militant Islamic students attacked a police checkpoint close to the mosque.
Street clashes quickly erupted, with police firing tear gas at the students and the students fighting back with guns and sticks. They then took refuge in the mosque and an adjoining women's seminary, which the troops subsequently surrounded.
Throughout the week, more than 1,200 people, mainly students from the mosque's two Islamic schools, fled the compound.
Tensions escalated Sunday when Pakistani army commander Lt. Col. Haroon-ul-Islam was shot and killed during an effort to free women and children inside the mosque by blasting holes in perimeter walls. Three other officers were also wounded in the operation.
Two students trying to surrender Friday were shot dead by other students in the mosque, intelligence sources said, but gave no additional details of how the shootings occurred. E-mail to a friend
CNN's Syed Mohsin Naqvi contributed to this report.