Local people say IKashmiri, regarded as one of the world's most dangerous militants, was amongst nine people killed and that he and his men had only recently arrived in the area.
Intelligence and security officials have said they had no information confirming that Kashmiri was killed.
A spokesman for the Pakistani Taliban, which has strong ties to Al Qaeda, said he was alive.
The US Department of State has labelled the Punjabi militant a "specially designated global terrorist", adding him to a list of high-profile militants.
He was accused of recently organising the recent assault on a Karachi naval base.
He has also been accused of involvement in the multiple attacks in Mumbai three years ago.
The death of the Pakistani militant would be another intelligence coup for the United States after US special forces killed Osama bin Laden in a town close to Islamabad on May 2.