Representative image. Photograph:( AFP )
Punjab Law Minister Basharat Raja said the officer who was leading the operation has been suspended from service.
Pakistani authorities on Sunday admitted that three of the four IS "terrorists" who were killed in an encounter with police in Punjab province were "innocent" even as 16 personnel involved in the shootout have been arrested.
"Police have arrested 16 personnel of counter terrorism department (CTD), and a premier intelligence agency allegedly involved in the encounter that took place in Sahiwal district, 200 kms from Lahore on Saturday. An FIR has also been instituted against them," Punjab Law Minister Basharat Raja told a news conference.
Raja said the officer who was leading the operation has been suspended from service.
Khalil, a resident of Lahore, his wife, their 13-year-old daughter and their neighbour Zeeshan, were on their way to a wedding in Burewala when they were shot dead by police in Zeeshan's car in the Qadirabad area on Saturday morning.
The CTD in a statement, however, said that Zeeshan was an active member of the Islamic State terror group and a phone call was intercepted from Afghanistan in which an ISIS commander had directed other members of the network to hide after the killing of Zeeshan.
The couple's three minor children in the car however survived. Their minor son sustained a bullet injury while their two daughters were unhurt.
Following the killings, the CTD claimed to have shot dead four IS "terrorists" including two women in what it said was an "intelligence-based operation".
On Sunday, the CTD declared Khalil and his family as "innocent", saying "neither Khalil nor his family members knew that Zeeshan was an ISIS terrorist who supplied ammunition to other members of his network".
It said Zeeshan offered a lift to Khalil and his family to Burewala only to transport ammunition and explosives.
"Police usually do not check a vehicle with women and children," the CTD said, adding that the first shot was fired by Zeeshan when his car was intercepted by the police. In the return of fire Zeeshan and the three others were killed.
The killing of the three innocents sent shock waves across the country as Prime Minister Imran Khan expressed grief.
"The CTD did a great job in the fight against terrorism but everyone must be accountable before the law," Khan said Twitter.
"As soon as the joint investigation team's report comes, swift action will be taken. The government's priority is protection of all its citizens," Khan said.
The Punjab government has said it will look after the surviving children of Khalil.
The CTD said that Zeeshan was also involved in the killing of three ISI intelligence officers in Multan, a police officer in Faisalabad and in the kidnappings of American national Warren Weinstein and Ali Haider Gilani, son of former prime minister Yousuf Raza Gilani.
The Opposition has condemned the killings and demanded the government bring the culprits to justice.