DAMADOLA, Pakistan (AFP) - Pakistani militants on Thursday accused the United States of carrying out a missile strike in the country's lawless tribal region and vowed to avenge the attack, which killed at least 12.

Maulvi Omar, spokesman for the Pakistani Taliban, said a house belonging to a local tribesman was hit late on Wednesday by a guided missile fired from a US drone.

Security officials told AFP at least 12 militants including some foreigners were among those killed in the strike in Damadola village in the northwestern Bajaur tribal district which borders Afghanistan's volatile Kunar province.

The foreign ministry in Islamabad, however, said the authorities were investigating what caused the explosion.

"We have spoken to the concerned authorities. The ministry of interior has informed us that the nature of the incident is being investigated," spokesman Mohammad Sadiq told a weekly briefing.

"It is still not clear whether it was a missile attack, whether it was a rocket attack or it was an internal explosion," he added.

The attack came as Taliban in the restive region are negotiating a deal with the new Pakistani government, which came to power after the defeat of US ally President Pervez Musharraf's supporters in February elections.

An AFP photographer in the remote mountainous village said more than 1,000 tribesmen gathered to bury eight people in Damadola, while four more were buried in neighbouring villages.

Shouting "Death to America" and waving klaashnikovs, the mourners vowed they would avenge the attacks from the US forces across the border, the photographer witnessed.

"This was an attack on us and we will take revenge from the Americans," a mourner, Abu Rehan, told AFP waving his kalashnikov.

Thousands of armed tribesmen later gathered in Khar, the main town in the militant-infested tribal district, to demonstrate against the missile strike, an AFP correspondent said.

A senior security official said two houses belonging to local Taliban militant leaders Maulvi Hasan and Maulvi Taj were the target of the attack, which destroyed the buildings completely.

Militant spokesman Omar said there were no Taliban leaders in the targeted area.

"The missile attack was an attempt to sabotage the (peace) talks" with the government, Omar said. "Americans do not want peace in the region."

He added that "talks would continue despite the missile attack", but warned the Taliban would avenge the killings.

"We have taken revenge for our martyrs in the past and we will take revenge now also," he said.

Meanwhile, a demonstration was held in Peshawar, the capital of North West Frontier Province, where protesters raised anti-US slogans, witnesses said.

Members of the Pakistan People's Party Sherpao carried a large banner which read: "We condemn this barbaric action of the the United States. Who befriends the US is the traitor of the nation."

The party is led by former interior minister Aftab Sherpao who had been playing an active role in Pakistan's drive against pro-Taliban and Al-Qaeda militants.

A US Predator drone targeted Al-Qaeda's deputy leader Ayman al-Zawahiri in Damadola in 2006, killing several rebels but missing him.

Missile attacks in the past have claimed the lives of several militants in Pakistan's volatile tribal belt.

Pakistan this week moved troops away from villages and towns in the region as the peace process advanced, officials said Wednesday.

As part of the process, more than 30 jailed tribesmen were freed Tuesday in return for the release of a dozen soldiers held by militants, a security official said.

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