Pakistani helicopter gunships and warplanes have been bombing suspected Taleban militants in the north-western Swat Valley, the military says.
Thousands of civilians continue to flee the area, with fighting especially heavy in the town of Mingora.
A son of the cleric who brokered a deal aimed at ending clashes is reported killed in shelling in a nearby area.
On Wednesday, US President Barack Obama vowed to "defeat al-Qaeda" and its allies in Pakistan and Afghanistan.
He was speaking after talks in Washington with Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari.
'Mortar'
Cleric Sufi Mohammed acted as a mediator between the government and Taleban forces in the north-west.
See a map of the region
He organised a recent peace deal in the Swat valley which has now broken down amid heavy fighting.
Family members say that Kiffayatullah was killed in the Daro area of Lower Dir late on Wednesday night.
"My brother was in his house when a mortar fell on it and he was killed," another son, Zia ul-Islam, told the BBC.
Sufi Mohammed's son-in-law was also injured in the attack.
There has been no word from the military or the Taleban in relation to the death.
The BBC's Syed Shoaib Hasan in Islamabad says that the death of Kiffayatullah is likely to exacerbate an already tense situation in the north-west.
Thousands of civilians continue to flee the area, with fighting especially heavy in the town of Mingora.
A son of the cleric who brokered a deal aimed at ending clashes is reported killed in shelling in a nearby area.
On Wednesday, US President Barack Obama vowed to "defeat al-Qaeda" and its allies in Pakistan and Afghanistan.
He was speaking after talks in Washington with Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari.
'Mortar'
Cleric Sufi Mohammed acted as a mediator between the government and Taleban forces in the north-west.
See a map of the region
He organised a recent peace deal in the Swat valley which has now broken down amid heavy fighting.
Family members say that Kiffayatullah was killed in the Daro area of Lower Dir late on Wednesday night.
"My brother was in his house when a mortar fell on it and he was killed," another son, Zia ul-Islam, told the BBC.
Sufi Mohammed's son-in-law was also injured in the attack.
There has been no word from the military or the Taleban in relation to the death.
The BBC's Syed Shoaib Hasan in Islamabad says that the death of Kiffayatullah is likely to exacerbate an already tense situation in the north-west.
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