Chanting slogans of "jihad is our way", burqa-clad women, some with babies, listened to fiery speeches from the daughter of the mosque's jailed cleric on the eve of the anniversary of a commando raid on the complex in which more than 100 people died.

"Our mujahideen (fighters) laid down their lives for the enforcement of the Islamic system in Pakistan. We are left behind to carry forward their mission," the daughter of cleric Abdul Aziz told the tightly guarded rally in the mosque compound.

Several thousand men attended a similar rally on Sunday to mark the anniversary of the July 10 commando raid that ended a week-long siege that began when gunmen from the mosque clashed with police.

Shortly after the Sunday rally ended, a suicide bomber attacked police who had been guarding the gathering killing 18 people, all but three of them policemen.

The attack highlighted the danger posed by militants in nuclear-armed Pakistan, where a new coalition government has been preoccupied with what to do with the unpopular President Pervez Musharraf, a staunch US ally who has been isolated since his allies were defeated in a February election.

The blast in the centre of the capital also compounded gloom on Pakistan's financial markets, where stocks have been sliding because of economic worries and the rupee has set new lows.

"AL JIHAD"

But there was no trouble on Wednesday as the cleric's daughter, who did not identify herself, told the crowd to steel their families for holy war.

"We should prepare our children and men for jihad," she said.

The crowd responded with shrill chants of "we are ready" and "al jihad".

Aziz was caught during the siege last year trying to slip through a cordon dressed in a woman's burqa. His brother, Abdul Rashid Ghazi, who was also a mosque cleric, was killed.

Ghazi's widow, identified as Umm-e-Hassam, said President Pervez Musharraf should be punished for ordering the crackdown: "This man is the enemy ... I want this man to be severely punished before I die," she told the rally.

The Lal Masjid and an adjoining women's madrasa, or religious school, had for years been a bastion of militant support in Islamabad and the clerics and their followers had waged an increasingly defiant campaign to enforce Taliban rule.

They occupied a state library, kidnapped women they accused of prostitution and some policemen, and stormed music and video shops and beauty parlours, much to the dismay of the moderate majority in the capital.

They also accumulated weapons and battled security forces for days, rejecting calls to surrender, before Musharraf ordered the commandos in to end the standoff.

The assault unleashed a wave of suicide bomb attacks across the country in which hundreds of people were killed, including former Prime Minister Benazir Bhutto.

Aziz's wife, identified as Umm-e-Hassan, said they had nothing to do with the attacks.

"We are not terrorists. Islam does not teach terrorism ... America and its stooges are terrorists," she told reporters at the rally, referring to the Pakistani army.

"We are holding this rally to tell the world we are alive and in high spirits. Islam can never be wiped out. It grows more after martyrs shed their blood."