The diplomat, Ms Lynne Tracy, was on her way to the US consulate in the city when a vehicle suddenly appeared and blocked the road, local police officer Arshad Khan told sources.

'A man in the intercepting Land Cruiser rolled down the window and opened fire with a Kalashnikov rifle, but the diplomat remained unhurt,' he said, adding that Ms Tracy was travelling in a bullet-proof vehicle.

The diplomat's driver quickly threw the car into reverse, hitting an auto rickshaw, he said.

The attackers fled the scene, Mr Khan said. The rickshaw driver suffered minor injuries.

Later, the US consulate issued a brief statement saying: 'There was a security incident in Peshawar this morning involving a US consulate vehicle and three employees'.

'There were no injuries and minimal damage to the vehicle. We are coordinating with Pakistani authorities investigating the incident,' it said.

An official who requested anonymity said the US diplomat was accompanied by her driver and a security officer.

Ms Tracy is a top official at the US consulate in Peshawar, the capital of troubled North West Frontier Province, which has been plagued by militant violence.

Pakistan's foreign ministry condemned the incident in a statement and said 'steps for enhanced security' had been taken.

'The government is committed to ensuring all possible measures for the security of the diplomatic community,' it said.

Peshawar, which is close to the Afghan border, has a population of more than 2.5 million people in addition to about 1.7 million Afghan refugees uprooted during the 1979-1989 Soviet occupation of Afghanistan.

It is witnessing a surge in violence blamed on Taliban militants, as Pakistani troops have launched operations against Islamic militants in the Swat valley and Taliban hideouts in the bordering tribal belt.

Pakistani forces moved into the tribal Bajaur area, a known hub of Al-Qaeda and Taliban militants, earlier this month. The two-week-old military operation there has left more than 500 people dead, most of them militants, officials say.

Pakistan on Monday banned the main Taliban militant group, Tehreek-i-Taliban Pakistan (TTP), and ordered its bank accounts and assets frozen.

Also Tuesday, at least five people were killed and 16 wounded when a bomb ripped through a hotel just outside the Pakistani capital Islamabad, police said.

Most of the victims were eating when the improvised explosive device planted at the roadside hotel went off, police officer Moin Ahmed said, adding that it was an act of terrorism.

Tuesday's incidents came a day after militants blew up a school in the suburban town of Badaber, near Peshawar. A police station in the same town came under Taliban attack last week. One policeman was killed and two wounded.

A Pakistan Air Force vehicle was blown up on August 12 when militants detonated a remote controlled bomb planted under a bridge in Peshawar. The blast killed 13 people including four air force officials.

Security forces in June launched a major operation against militants in Khyber tribal region adjoining Peshawar after saying that the rebels could take over the city.

Pakistani militants trying to emulate Afghanistan's 1996-2001 Taliban regime are trying to impose a harsh version of Islamic law in the region and have bombed music shops and hair salons in the past.

Taliban militants last week shot dead two women in Peshawar after accusing them of being prostitutes. -- AFP