The Pakistani army says it has seized parts of the Swat valley, as it begins the second day of an offensive against Taliban militants in the main city.
Troops are engaged in hand-to-hand fighting with the militants in Mingora, and are said to have cleared them from another town, Matta.
At least 17 militants have been killed in the clashes, the army says. The Taliban deny the deaths.
The fighting began after a peace deal broke down earlier this month.
The military says Mingora is surrounded, most of the militants' ammunition dumps are destroyed and their supply routes cut off.
Meanwhile police said a French tourist had been kidnapped by gunmen in the southern Baluchistan province.
Four other French nationals travelling with the tourist reported the kidnapping, near the town of Dalbandin 80km (50 miles) from the Afghan border.
'Slow offensive'
The BBC's Shoaib Hassan, in Islamabad, says the Swat battle is the most important yet in the army's offensive against the Taliban in the north-west.