"More than 10,000 people participated in the rally," senior police officer Mustansar Bajwa told AFP.

Chanting slogans against terrorism, the demonstrators called for peace in the country, which has been troubled by bombings and suicide attacks.

Attacks blamed on homegrown Taliban and other Islamist extremists have killed more than 4,000 people since government troops stormed a radical mosque in Islamabad three years ago.

The demonstrators marched from the Punjab provincial assembly building to the city's main Data Darbar shrine, amid a heavy police presence, witnesses said.

The rally was called by the Pakistan Awami Tehreek party, representing Sufi Islam.

"Islam is religion of peace and acts of terrorism and bloodshed are against its teachings," the party's local chief Raheek Abbasi told the rally.

He urged the government to "improve resources and provide jobs and justice to the people to end the menace."

The protest came three days after a bomb blast near a Sunni Muslim shrine in Lahore killed two people and wounded more than a dozen worshippers.

Two suicide bombers blew themselves up among crowds of worshippers at the Data Darbar shrine in July, killing 42 people.

In October two suicide bombers blew themselves up at the shrine of Abdullah Shah Ghazi in karachi, killing nine worshippers, including two children.

Sufi worshippers, who follow a mystical strain of Islam, have frequently been the target of bloody attacks by Islamist militants in Pakistan.