A general view of the five-star Pearl Continental hotel located on a hill in city of Gwadar. Banaras Khan / AFP

An attack on a luxury hotel in the southwestern city of Gwadar was a bid to "sabotage prosperity," Pakistani prime minister Imran Khan said on Sunday, as police confirmed all the attackers had been killed.

At least one person was shot dead Saturday after gunmen stormed a luxury hotel in the southwestern Pakistani city of Gwadar, the centrepiece of a multi-billion dollar Chinese infrastructure project.

A Baloch separatist group, the Balochistan Liberation Army (BLA), claimed responsibility for the attack via Twitter.

"Such attempts especially in Balochistan are an effort to sabotage our economic projects and prosperity. We shall not allow these agendas to succeed," Khan said in a statement issued by his office.

The Chinese embassy in Islamabad also strongly condemned the incident.

Local police said four gunmen who had stormed the hotel, shooting dead a security guard, had been killed overnight by security forces.

"All four terrorists were killed and security forces had taken complete control of the hotel building," a local police official in Gwadar told AFP via telephone.

His account was confirmed by a security source in Islamabad. The military had said on Saturday that there were three gunmen.

Mohammad Aslam, a police official in Gwadar, told AFP Saturday that only staff were present in the building at the time of the attack.

The BLA is one of a myriad of insurgent groups fighting in tightly-guarded Balochistan province, which has been rocked by separatist, hardliner and sectarian violence for years.

The Pearl Continental, part of Pakistan's largest five-star hotel chain, is the only luxury hotel in Gwadar, frequented by foreign and Pakistani business delegations as well as diplomats.

It sits isolated on a ridge overlooking the Arabian Sea port city that was formerly a small fishing village, but now touted by officials as "the next Dubai" thanks to the multi-billion dollar China-Pakistan Economic Corridor (CPEC).

Part of China's Belt and Road initiative, CPEC seeks to connect the western Chinese province of Xinjiang with Gwadar, with the development of the port as the plan's flagship project.
Agence France-Presse