One suspected Pakistani militant was killed in Mumbai in a shootout on Tuesday, another arrested by the Anti-Terrorism Squad and some arms and ammunitions recovered, police said.

The slain person has been identified as Mohammad Ali alias Abu Osama from Faisalabad in Pakistan, Police Commissioner A N Roy said.

The shootout followed a late night arrest of another Pakistani national, identified as Mohammad Riyaz Nawabuddin (21), Roy said, adding that at this stage it could not be said whether the two were linked to July 11 bomb blasts in commuter trains.

Roy told reporters that ATS intercepted a Maruti [Get Quote] Van, in which Nawabuddin was travelling on Monday night in Wadala TT area.

On searching it, the police recovered 1.5 kg of white powder - suspected to be some kind of explosive - along with five detonators, a pistol with five rounds, two number plates and currency - Rs 1,450 and $50.

The suspect told the police that he hailed from Machiswala area in Bihari district of Pakistan and was on his way to meet his associate, living in the same area.

Following this information, the ATS team reached a dilapidated building near Antop Hill at around 4:30 am.

Mohammad Ali, the arrested person's associate, was found to be hiding on the third floor. Police shot him dead as he opened fire on the ATS team.

"He fired eighteen rounds from his AK-47," Roy said.

Police found 72 rounds of AK-47 on his body, Roy said.

Roy said the slain man hailed from Charchak in Faisalabad district. According to what his arrested associate has revealed so far, Ali came to India some time back and was living in a town in northern India.