Since its launch, the festival has tried to promote better ties between India and Pakistan by screening Indian films and inviting Indian artists such as actor Ajay Devgan and director Mahesh Bhatt, who both attended the last festival in 2006.
But politics has cast a pall over the KaraFilm festival with tension between nuclear-armed India and Pakistan following the militant attack on Mumbai in November in which 179 people were killed.
"The rising tensions with our neighbor India after the brutal terrorist attacks in Mumbai have also negatively impacted the relationships we had so carefully cultivated over the last six years," said the festival director, Hasan Zaidi.
Zaidi said most of the Indian artists were heeding an Indian travel advisory to avoid Pakistan. Those who still wanted to come couldn't get visas, he said.
However, Zaidi said the festival would go on despite the problems, with more than 230 films from about 44 countries due to be screened in Karachi up to February 15.
"We are certainly not about to give up," Zaidi told a news conference.
"In a country where creativity and film is once again under attack from forces of extremism, and precious few institutions of art and culture exist, it is particularly galling to stand by and see all of one's efforts to establish just such a credible institution endangered."
The festival was launched in 2001 and was held annually until 2007, when it was postponed to early 2008 after a suicide bomb attack on former prime minister Benazir Bhutto's homecoming procession in Karachi killed about 140 people.
It was canceled after Bhutto's assassination in December 2007 sparked violence in Karachi and other parts of the south.
Among the films to be screened are 120 short films, more than 60 documentaries and about 50 feature films.
Films ranging from Australia to Iran and Venezuela will be shown as well as many from India including a documentary called "7 Islands and a Metro" which organizers say is a tale of Mumbai "through a tapestry of fiction, cinema verite, art objects ... sound installations and literary texts."