Al-Qaeda in the Indian Subcontinent, the new group announced last week by Ayman al-Zawahiri to bolster his flagging fortunes, suffered a setback when three of its fighters were killed and seven arrested in its first ever terror attack.

Heavily armed militants attacked a naval dock in Karachi's sea port on Saturday night and targeted what they believed was an American aircraft carrier, but instead found a Pakistan Navy frigate and were overwhelmed before they could cause any damage, investigators said.

Three militants were killed in the attack, four were captured and another three arrested the following day on information from interrogations. Two Pakistan Navy guards were wounded in the fighting.

"It was a complete failure, they did not do any kind of damage, some were captured and we caught more, seven so far and may be more to come. They were well-equipped and came with the intention of taking a ship into their custody but they were caught in the initial stages," a senior source close to the investigation told the Telegraph.

Al-Qaeda in the Indian Subcontinent, the militant group unveiled by Zawahiri last week to demonstrate his clout despite the rise of Islamic State (Isil), claimed responsibility for the attack on Thursday and said former Pakistan Navy men had carried it out.

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