Armed militants have taken 450 passengers hostage and wounded the train driver during a "terrorist attack" in Pakistan`s volatile southwestern Balochistan province, officials said.

The separatist Baloch Liberation Army has threatened to execute all the hostages it has in its custody if the Pakistani authorities attempt to intervene.

"Over 450 passengers onboard are being held hostage by gunmen", Muhammad Kashif, a senior railway government official in Quetta, the capital of the province, told reporters.

The train was trapped inside a tunnel after the attack, during which it came under fire and the driver was wounded, police and railway officials said.