The presence of IS flags, though symbolic, on electricity poles in a closely-guarded part of the historic city of Taxila, near the Pakistan Ordnance Factory, has added to the fear that the terrorist outfit may exploit militant groups in the country.
The flags came up after reports surfaced that a spokesman of the IS visited banned militant outfit Jundullah in the troubled southwestern Balochistan province.
Jundullah is a branch of the Pakistani Taliban or the TTP, which recently sacked its spokesman for announcing allegiance to the IS. It has also claimed responsibility for the Wagah Border attack that killed at least 63 people.
Law enforcement agencies confiscated four flags of the IS, also known locally by its Arabic acronym 'Daish', Dawn reported.
A senior Intelligence officer told the newspaper that a few flags, bearing the IS monogram, were found near the main entrance to the POF complex, while others were spotted on nearby electricity poles.
So far, police and intelligence agencies do not know who put up the flags in the heavily-protected area.
A probe has been launched to root out any sympathisers of the terrorist group from areas near the federal capital.
However, no suspects have been detained in connection with this matter.
Investigators are looking at footage from surveillance cameras to identify those who put up the flags.
Regional Police Officer Akhtar Umar Hayat Laleka cautiously indicated that there had been reports of the presence of one such flag in the area and a team had been dispatched to investigate the matter.
The Islamic State group has captured large swaths of territory in Iraq and Syria and declared a self-styled caliphate, or Islamic empire, in the Middle East in June.
Pakistan army chief to visit Kabul on Thursday
Wagah border blast: Around 45 suspects taken into custody
World must reject linkage between religion, terror: Modi
World's most wanted woman terrorist is dead
Suicide car bomber targets Pakistani army, kills 5