Pakistani soldiers battled Taliban militants in towns in Swat on Tuesday as authorities scrambled to get food to thousands of civilians trapped by the fighting.
The government has said the offensive, launched this month as international alarm grew over an intensifying insurgency, was making progress and every effort would be made to help the more than 1 million people displaced by the fighting.
A surge in militant violence in nuclear-armed Pakistan over the past two years has raised fears for its stability and alarmed the United States, which needs Pakistani action to help defeat al Qaeda and bring stability to neighbouring Afghanistan.
Though the offensive in the Taliban's Swat bastion is broadly backed by politicians and members of the public, support will quickly evaporate if many civilians are killed or if the displaced languish in misery.
Soldiers are advancing on the valley's towns from different directions after they finished the first part of the campaign aimed at Taliban strongholds and supply depots in the mountains, the military said.
Soldiers conducting cordon and search operations in Matta town clashed with militants and an officer and a soldier were killed while seven soldiers were wounded, the military said.
Troops were also in, or advancing on, the towns of Kanju and Takhtaband, it said.
"Fierce clashes are taking place at both places," the military said in a statement, adding that 14 militants and two soldiers were killed in those clashes.
The government says more than 1,000 militants have been killed in the offensive, while the military says more than 50 soldiers have been killed.
There was no independent confirmation of the government's estimate of militant casualties. Reporters have left Swat and the army is not letting any back in. Communications with residents still there have been disrupted.
About 15,000 members of the security forces are fighting between 4,000 and 5,000 militants in Swat, the military says.
SUPPLY CHAIN
The fighting has worried investors in Pakistani stocks and the main index has dipped over the past two weeks despite signs of economic improvement such as lower inflation which allowed for an interest rate cut last month.
The market ended 1.46 percent lower at 7,067.85 points in thin trade as investors remained cautious, dealers said.
The fighting has displaced more than 1.4 million people, the United Nations said on Monday. They are joining about 555,000 people displaced by earlier fighting.
The United Nations said it would soon launch an emergency appeal for hundreds of millions of dollars to help the displaced over the next 12 months.
Of more immediate concern is the fate of civilians still trapped in the valley.
Human Rights Watch said Taliban had laid landmines and were using civilians as human shields, while the army had inflicted civilian casualties in its artillery and air attacks.
The head of the government's relief effort, Lieutenant-General Nadeem Ahmed, said 10 trucks loaded with food for civilians had been sent in to the valley while authorities were trying to ensure regular supplies for them.
"We're trying to establish a supply chain through which we can send food at regular intervals to those in embattled areas," Ahmed told a briefing.
"We are also looking for areas which are close to the fighting areas, where no aid agencies are willing to go, where food can be supplied through the army," he said.
President Asif Ali Zardari said in an interview with the Sunday Times Swat was just the beginning and the army would next move against militants in the Waziristan region on the Afghan border.
In the Mohmand region, also on the Afghan border, security forces killed at least 13 Taliban and captured five foreign militants in a clash, a paramilitary force spokesman said.