KARACHI, Aug 17 (Reuters) - The leader of a banned Sunni Muslim militant party in Pakistan was shot dead on Monday in an apparent sectarian attack, police and party officials said.

Hundreds of Pakistanis have been killed in recent years in violence between militants from the Sunni Muslim majority and their minority Shi'ite Muslim rivals.

The killings, especially of faction leaders, raise fears of revenge attacks triggering cycles of violence.

Ali Sher Haideri, chief of the Millat-e-Islamia Pakistan, was returning home in Khairpur, 240 km (150 miles) northeast of the southern city of Karachi, after a public gathering when gunmen ambushed his car, police said.

"He was killed along with one of his companions who was driving the car, while one of the six attackers was also killed when his guards returned fire," Pir Muhammad Shah, chief of police in Khairpur, told Reuters by telephone.

Millat-e-Islamia, or Nation of Islam, was formed in 2002 by members of the notorious Sipah-e-Sahaba Pakistan (SSP), a Sunni Muslim organisation that was for years involved in tit-for-tat killings with Shi'ite militants.

The government banned the SSP along with several other militant groups in 2002 after joining the U.S.-led campaign against terrorism following the Sept. 11 attacks on the United States.

The Millat-e-Islamia was officially banned in 2003 though it has continued to operate.

Mohammad Ahmed Ludhianvi, president of the party, blamed Shi'ites for Haideri's killing.

"The attackers were none other than Shi'ites," Ludhianvi told Reuters.

Shi'ites account for about 20 percent of Pakistan's population. Ordinary members of the sects generally live in harmony despite the long history of violence between militants. (Reporting by Faisal Aziz and Asim Tanveer in MULTAN; Editing by Robert Birsel)

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