The arrested men have been involved in grenade attacks and sectarian killings in the metropolis, a police official said.
SSP South Dr Farooq told media that the police have arrested four alleged terrorists from the phase-I area of Defence and captured four kilogrammes of explosives, detonators, ball bearings and four pistols from their possession.
Arrested suspects Hanif alias Kala, Ashraf Ali alias Bholu, Rehmatullah and Zahid Hussain have been affiliated with a banned sectarian group, he said.
According to police, the arrested men were involved in a bomb blast at a gambling den near Lea Market, which claimed 16 lives. The accused are also involved in sectarian targeted killings, he said.
The arrested men have confessed to kill six people on sectarian grounds, police official said.
Police officials futher questioning the accused and conducting raids to arrest their accomplices, the official added.