Pakistan said on Tuesday troops were locked in fierce street battles with Taliban fighters in the northwest where a rights group accused both sides of inflicting high civilian casualties.
Military officials said government forces were advancing on several fronts toward Mingora, the Taliban-held main town in the Swat valley.
The blistering offensive against Islamist militants, said to threaten the sovereignty of the nuclear-armed nation, has concentrated increasingly on the valley, once a scenic tourist hotspot.
Pakistani officials said on Monday the fight had moved into the Taliban-held town of Matta as well as Kanju, which is a short distance from Mingora.
Footage broadcast on private Pakistan television channel Geo showed armed soldiers standing outside locked shops in the main bazaar in Matta, a bastion of Maulana Fazlullah who has led a two-year uprising to enforce Islamic law.
"Our troops are advancing in Matta town where security forces have achieved a major success," a military official told AFP on condition of anonymity.
"Troops continue to close in on Mingora, from where Taliban are trying to escape but our strategy is not to let them flee," the official said.
He said the chief objective in coming days was "to take over the Taliban's main headquarters in Peochar," where commandos opened a new front last week.
The official also reported intense battles in Takhta Bund, described as the main Taliban supply route.
Another security official confirmed fighting in Takhta Bund, saying efforts were underway to cut off this route to "choke" militants in the area.
Pakistan is under tough US pressure to crush militants whom Washington has branded as the greatest terror threat to the West.
However more than 1.45 million people have been displaced across the region by the fighting since May 2, raising alarm among humanitarian agencies.
The military says up to 15,000 troops are taking on about 4,000 well-armed fighters in Swat, where Islamabad has ordered a battle to "eliminate" Islamist militants who advanced 100 kilometres (60 miles) from the Pakistani capital.
Jet fighters and attack helicopters -- which residents blame for collateral damage and civilian casualties -- hit suspected militant positions overnight, officials said.
US-based Human Rights Watch blamed Taliban militants using "human shields" and Pakistan military strikes for a high loss of civilian life.
It quoted residents as saying that Taliban militants laid mines in Mingora and "prevented many civilians from fleeing, using them as 'human shields' to deter attack".
The group also said Pakistani forces "appeared to have taken insufficient precautionary measures in aerial and artillery attacks that have caused a high loss of civilian life."
Authorities say more than 1,000 militants and at least 49 troops have been killed in a three-pronged onslaught launched in the districts of Lower Dir on April 26, Buner on April 28 and Swat on May 8.
The UN refugee agency said 1.45 million people had registered as displaced since May 2, pushing to more than two million the number forced to flee since August 2008.
Rashid Khalikov, director of the UN humanitarian office in New York, warned aid workers were struggling to reach many of those who fled as the situation deteriorated with "absolutely horrible speed."
But Pakistani commentators have praised the military for moving into towns in Swat, warning operations would be deadly but were vital for the military to really flush out Taliban strongholds.
"This is the first time the army is doing something like this against Taliban militants," defence and political analyst Talat Masood to AFP.
"Even US troops never engaged in street battles in Afghanistan... Obviously there will be more casualties when you face the enemy frontally. Here you are very close to the enemy and directly in their firing range.
"The militants do not want to abandon their strongholds. They are motivated, they are brainwashed," Masood added.