"Three or four attackers have entered the Pearl Continental hotel in Gwadar", Zia Langove, Balochistan provincial home minister, said in a statement on Saturday.
"There were no Chinese or Pakistani guests in the hotel", Mohammad Aslam, the on-duty officer in Gwadar said, adding that only staff were present in the building and that at least three are believed to be injured. They encircled the terrorists around the main stairs leading to the top floor.
Soldiers of the Frontier Corps, Levies and police officials are carrying out the operation, sources say.
Local media were reporting the sounds of gunfire.
At least three terrorists stormed into PC Hotel Gwadar.
All foreign and local guests staying at the hotel had been safely evacuated, Express Tribune quoted Balochistan Information Minister Zahoor Buledi as saying.More news: OnePlus 7 Pro packs improved vibration motor, so no more mushy notifications
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Police and paramilitary troops cordoned off the hotel compound, Bangulzai added.
The five-star Zaver Pearl Continental hotel sits perched on a hill in the southwestern Pakistani city of Gwadar.
Last month, 14 Pakistani security personnel were forced out of passenger buses near Gwadar in the main coastal highway and shot dead in an attack claimed by a separatist Baloch militant group. He also said that "95 per cent of the hotel has been evacuated".
Gwadar port is one of the focal points of the Dollars 50 billion China-Pakistan Economic Corridor (CPEC) with many Chinese workers from other provinces of Pakistan working at the port.
Balochistan province is Pakistan's poorest and most restive.
The BLA has targeted Chinese workers in Pakistan multiple times, including during a brazen daylight attack on the Chinese consulate in Karachi that killed four people in November past year.
Gwadar is one of the major hubs involved in the China-Pakistan Economic Corridor project development and is often visited by Chinese nationals, Pakistani Samaa TV reports.