(Updates with death toll, more violence)

TANK, Pakistan, March 26 (Reuters) - Pakistani police clashed with suspected Taliban militants trying to recruit schoolchildren in a northwestern town on Monday and a policeman and two militants were killed, police said.

After the gun battle in Tank town in North West Frontier Province (NWFP), where security analysts say the influence of Islamist militants is growing, the militants threw at least three hand grenades in different parts of the town, injuring around a dozen people.

The fighting began after a group of Taliban fighters visited a school and urged the children to give up their studies and join jihad, or holy war.

"They assembled the students in the school ground and told them jihad is more important than education," said Fareed Khan, principal of the privately-run Oxford Public School.

Police confronted the Taliban as they left the school and a gunfight broke out.

"A police inspector and a local militant were killed. Two Taliban have been arrested, one is seriously wounded," said a police officer. The wounded Taliban later succumbed to injuries.

Tank is near the South Waziristan region, a hotbed of Islamist support on the Afghan border, where hundreds of people have been killed, most recently in clashes between foreign al Qaeda-linked militants and Pakistani tribesmen.

Elsewhere in NWFP three people were wounded when a bomb strapped to motorbike exploded outside a hotel in Peshawar.

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