DERA ISMAIL KHAN, Pakistan - Taliban fighters disguised as police and armed with bombs and grenades broke 250 prisoners out of a Pakistan jail in a brazen overnight operation that raised serious questions over the new government's ability to combat militancy.Fighting continued into the early hours of Tuesday, with explosions and machine gunfire rattling the city of Dera Ismail Khan in Khyber Pakhtunkhwa province near Pakistan's lawless tribal regions bordering Afghanistan.The attack underlines the growing capabilities of the Pakistani branch of the Taliban, an offshoot of the Islamist insurgents of the same name in Afghanistan. The freed prisoners included dozens of top militants.BRAZEN ATTACKThe Pakistani Taliban said they had sent a squad of 100 fighters and seven suicide bombers on a mission to free some of their top leaders, and they said they released 250 prisoners -- a number roughly matched by local Pakistani authorities.Mushtaq Jadoon, the town's civil commissioner, said the 253 escaped prisoners included 30 top militants and six people on death row. Those who escaped are believed to have been whisked away to the lawless tribal areas of South and North Waziristan.As the gunbattle unfolded, gunmen took over a nearby house and hospital, holding the residents hostage as they fired on police from the rooftops and laid ambushes for reinforcements.Police Constable Gul Mohammed said he had been rushing to the scene when he was challenged by two young boys holding rifles."They told me to stop," he said. "I told them I am a policeman, and that's when they opened fire." He added that he was shot three times.The heavily guarded jail houses around 5,000 prisoners. Around 250 are Pakistani Taliban and members of banned sectarian groups such as Lashkar-e-Jhangvi, a Sunni militant group that has killed hundreds of Shi'ite civilians this year.At least 12 were killed, including four Shi'ite prisoners whose throats were slashed by gunmen, prison officials said.A senior Taliban official told Reuters separately the attack on the prison was masterminded by Adnan Rashid, a Taliban commander who was himself freed when his prison in the northern town of Bannu was overran by militants last year.After that attack, militants told Reuters they had been helped by insiders in the security services. An inquiry later found there were far fewer guards on duty than there should have been and those who were there lacked sufficient ammunition.Months after promising peace talks with the insurgents, Prime Minister Nawaz Sharif appears to be accepting that the use of military force may be unavoidable.Dozens of gunmen launched the attack by blowing up the electricity line to the prison and detonating heavy explosions that breached the outer walls.The militants then fought their way inside using rocket-propelled grenades and machine guns, and calling the names of Taliban prisoners through loud speakers."It's completely dark in there. We don't know what's going on but there is fighting," provincial prisons chief Khalid Abbas told Reuters as the fighting unfolded.Security forces said they had imposed a curfew on the city and the gunbattle was over by dawn. A Reuters reporter at the scene saw security forces and bomb disposal squads conducting searches amid ruined walls strewn with bullet holes. The audacity of the attack raises embarrassing questions over how well-prepared Pakistani security forces are following a series of high-profile attacks, and underscores the challenges facing Pakistan's new government in combating the militancy.It also comes the day lawmakers are due to choose a new president in a largely ceremonial vote, and two days before a major Shi'ite festival which security officials have warned could be attacked."It was a heavily guarded jail and considered one of the most protected prisons in the province," said a senior government official in Peshawar, capital of Khyber Pakhtunkhwa."We will investigate how the militants managed to come from the distant tribal areas and break into the jail and take away their people."Another security official said provincial authorities received warning of the impending attack two weeks ago.He said phone intercepts indicated the militants had been planning a jail break and interrogations of captured fighters confirmed it. Security officials had alerted the provincial governor of the threat based on the intercepts.