One soldier also died and 15 were wounded, they said.
The raid came as US President George Bush, on his surprise first trip to Kabul, said he would discuss cross-border infiltration by militants when he would meet President Pervez Musharraf during visit to Pakistan starting on Friday.
Pakistan army spokesman Major General Shaukat Sultan said the raid on a sprawling hideout at Saidgai village in North Waziristan tribal region followed intelligence that there was a big gathering of foreign militants.
Helicopter gunships pounded the militant complex, which housed eight residential quarters, before ground troops moved in for a search operation, prompting a fierce gunbattle.
Local administration official Zaheerul Islam said the militants were targeted following information that they were carrying out attacks across the Afghan border.
"We have reports that up to 40 militants, mainly foreigners, were killed in the raid on the compound where there was a big gathering of foreign militants," a security official in the region told AFP. Another 20 were wounded, he added.
Sultan said that the foreign militants and their local supporters were killed in the operation, but added that he did not have the exact death toll or the nationalities of those involved.
A local official said that among those killed was an al Qaeda Chechen commander who was targeted when he tried to escape. He was identified as Imam. The Pakistan security official said that the raid was conducted on specific information that al Qaeda was using the compound as a base to launch attacks across the border.
"It was an al Qaeda camp and a training centre," he said.
Sultan said militants had stored a big cache of ammunition in the compound, which caught fire after the air strike. Explosions were heard till an hour after the raid.
Bush told reporters in Kabul after talks with Karzai that the cross-border attacks were harming US troops, some 20,000 of whom are deployed in Afghanistan - mainly along the border with Pakistan.
"I will bring up the cross-border infiltration's with President Musharraf," Bush told reporters. "These infiltration's are causing harm to friends, allies and cause harm to US troops. And, that will be a topic of conversation," he added.