Pakistani soldiers have entered the main town in the Swat valley and engaged in fierce street battles with Taliban fighters, the military has said.
Major-General Athar Abbas, a Pakistani military spokesman, said on Saturday that troops had killed at least 17 Taliban fighters as they moved into in Mingora.
"Street fights have begun," Abbas said. "We have cleared some of the area in the city."
Al Jazeera's Imran Khan, reporting from the capital, Islamabad, said that the urban battles now being fought by the Pakistani infantry marked a new phase in the conflict in North West Frontier Province.
"The army is telling us that street fighting will be one of the key phases of this battle for Mingora, so far they have used heavy artillery and air power to pound Taliban targets," he said.
"They say they have already taken control of a main bridge into Mingora and they have also taken control of the main interchange. The battle, they say, is going their way.
"But the Taliban know this area very well and it is likely they will have been preparing for this moment for some time. It is likely they will have built tunnels and will know exactly what rooftops to get on."
'Important phase'
There were reports that troops had captured and destroyed an explosives-laden vehicle and killed a suspected suicide bomber in the early stages of the fighting.
Mingora, the administrative and business hub of Swat, has been under the effective control of Taliban fighters for weeks.
There are reports that Mullah Fazlullah, one of the leaders of the Pakistani Taliban is in the town.
"Today the most important phase of operation Rah-e-Rast, the clearance of Mingora, has commenced," the military said in a statement on its website.
"In the last 24 hours, security forces have entered Mingora; 17 miscreants-terrorists, including important miscreant commander were killed," it said.
Al Jazeera's Mike Hanna, who travelled to the war zone with the Pakistani military, said: "They believe they will be taking the city in the next 34 to 48 hours.
"The army says it has secured large areas and that it has hit the militant movement very strongly, but the fact that we are still escorted by helicopter gunships ... indicates that there is still a fear of ongoing action."
Civilian fears
Many of the 300,000 people who live in Mongora are believed to have fled since the military began its offensive in Swat, Lower Dir and Buner several weeks ago.
Abbas said that only 10 per cent of the population remained in the town, but the street-to-street has raised the possibility of civilian casulaties.
US-based Human Rights Watch earlier this week quoted residents as saying that the Taliban had mined Mingora and "prevented many civilians from fleeing, using them as human shields to deter attack".
It 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".
Military commanders have stressed that they are under orders to avoid collateral damage and avoid using heavy weaponry in built-up areas.
The offensive in Swat and surrounding areas in the North West Frontier Province (NWFP) has triggered an exodus of nearly two million refugees from the region.
While some of those displaced have taken refuge in government camps, a majority of them have taken shelter with friends and relatives.
The military has said it had inflicted heavy losses on the Taliban, with about 1,000 fighters reported to have been killed.
Meanwhile, Yousuf Raza Gilani, Pakistan's prime minister, has played down the suggestion of Asif Ali Zardari, the president, that the military offensive could be extended to the sem-autonomous South Waziristan region.
