The gunmen, armed with automatic weapons, proceeded towards the gate of the consulate after killing the policemen, defence contractor and analyst Ikram Sehgal said.
Three heavily-armed suicide bombers on Friday stormed the Chinese consulate in Pakistan's largest metropolis Karachi, killing two policemen before being shot dead by security forces which foiled the daring attack in the high-security zone, authorities said.
The consulate, located in the posh Clifton area, came under attack early morning.
Three suspected suicide bombers were killed before they were able to enter the facility as forces successfully foiled the attack, Karachi Police Chief Amir Shaikh said.
Nine hand grenades, Kalashnikov bullets, magazines and explosives were recovered from the possession of the terrorists, Geo news quoted police officials as saying.
"Food supplies and medicines were also recovered from their possession," officials said.
"We have received two dead bodies of policemen and an injured Chinese security guard who is under treatment," said Seemi Jamali, the executive director at Jinnah Hospital.
The Sindh government and the Inter-Services Public Relations Wing (ISPR) confirmed that three terrorists were killed in the operation.
The heavily-guarded E-Street neighbourhood, which is considered a red zone, is home to a number of upscale restaurants, diplomatic missions and schools.
The Bilawal House of Pakistan People's Party Chairman Bilawal Bhutto Zardari is also in the area. Schools and eateries have been locked down until a clearance operation is concluded.
Residents said they first heard firing and explosions around 9.30 AM (local time).
"The terrorists first attacked the checkpost outside the consulate and detonated a hand grenade in the area," Shaikh said.
Shaikh said the attackers had parked their vehicle at some distance from the consulate before moving towards it.
Defence analyst and security contractor Ikram Sehgal, whose company's guards have been posted at the consulate, said that the attackers had first engaged in an exchange of fire with policemen.
After the policemen were killed, he said, the attackers proceeded towards the gate of the consulate. However, the guards were quick to usher civilians with consular business into the building and shut the gates behind them.
Chinese staff at the mission were taken to the main building, Sehgal said.
The paramilitary rangers than reached the spot and engaged the attackers, leaving three of them killed. Weapons and explosive materials were recovered from the attackers, he said.
Sheikh said that all Chinese staffers "are safe and secure".
The security situation has been brought under control and all areas will soon be cleared, he said, adding that a team of police has been deployed inside the consulate.
The Foreign Office spokesman said that Islamabad is "in touch with the relevant agencies and will react quickly" to ascertain the facts.
Shaikh said he would be able to provide a clearer account of the attack later.
The area, considered a red zone, is heavily guarded.
Sindh Chief Minister Murad Ali Shah contacted the Chinese consul general and assured him that the situation will be taken under control.
Governor of Sindh Imran Ismail has sought a report on the attack from the Sindh inspector general of police.
PTI