The demolition began under the glare of spot lights and amidst tight security at around 9 pm on Saturday night. All roads leading to the compound in Bilal Town, located about 800 yards from the elite Pakistan Military Academy, were closed before the work began.
Journalists who were able to get close to the compound despite the security cordon said large sections of the surrounding wall and a three-storey building had already been razed.
Geo News channel beamed footage that showed sections of the walls of all three storeys of the building had been torn down. Parts of the walls around the compound too had been demolished and heavy earth-moving machinery and cranes could be seen in the 3,000 square metre compound.
It was not immediately clear who had ordered the demolition and there was no official word from the local administration or the military, which had taken control of the compound shortly after US Navy Seals killed the al-Qaeda chief in a pre-dawn raid on May 2 last year.
An unnamed Pakistani military official was quoted by CNN as saying that the compound was demolished so that it did not become a shrine for jehadi elements.
Destroying the compound would "demoralize senior militant leaders", the official said. "The action was taken to keep the compound from ever becoming a shrine for bin Laden`s followers. It`s a message that Pakistan doesn`t want to keep anything connected with this terrorist," the official said.
Local residents said large police contingents had been deployed in the area. Only people who lived in Bilal Town were being allowed into the area, they said.
The compound, which was completed in 2005, was surrounded by walls that ranged from 10 feet to 18 feet in height. The land for the compound was bought by Arshad Khan, one of two al-Qaeda couriers killed with bin Laden, for about USD 50,000.
Pakistani officials have said 27 people, including bin Laden`s three wives and 16 children, were living in the three-storey building and an adjoining guesthouse.
The US raid and bin Laden`s presence in a garrison town deeply embarrassed Pakistan`s powerful security establishment. Reports have said that bin Laden lived in the compound for about five years.
Shortly after the US raid, then CIA chief Leon Panetta had raised questions about the incompetence or complicity of Pakistani authorities over bin Laden?s presence close to a military academy.
Pakistan-US ties have not yet recovered from the blow of the raid against bin Laden and Prime Minister Yousuf Raza Gilani has ordered a parliamentary review to reset the ties.
In the past, security agencies had demolished Jamia Hafsa, a seminary affiliated to the radical clerics of Lal Masjid in Islamabad, after a military operation in the mosque in 2007.
The walls of bin Laden`s compound were higher and thicker than those of every house in Bilal Town. The compound consisted of three portions - a big open area for farming, a built up structure and a lawn on the north side that was smaller than the farming area. There was no other compound of the same size in the area.