Pakistan said at least 21 militants were killed in an overnight clash.
Fighting broke out when a group of more than 50 militants attacked a military outpost in the Khadizai area.
Security officials say the militants were killed when government troops retaliated with artillery and heavy weapons.
Independent confirmation was not possible because journalists and aid workers are blocked from the area.
Khadizai is in Upper Orakzai, most of which is under Taliban control and is the scene of frequent clashes between security forces and militants.
Pakistan's seven tribal districts near the Afghan border are rife with homegrown insurgents and are strongholds of Taliban and Al-Qaeda militants.
Based on reporting by AFP and RFE/RL's Radio Mashaal