Pakistani troops and helicopter gunships have attacked militants in the north-western district of Swat, killing 10 of them, officials say.
Residents are fleeing, fearing violence will continue
Violence flared in the area a few days ago, after about 2,500 soldiers were deployed to the area to combat rising Islamist militancy.
At least 17 troops died in an apparent bomb attack on a paramilitary vehicle on Thursday, and clashes followed.
Hundreds of local people have been fleeing the violence.
Pakistan is moving to confront pro-Taleban militant Maulana Fazlullah, who wants to impose Sharia law and has reportedly used radio broadcasts to call for jihad, or holy war, against the Pakistani authorities.
A spokesman for the Pakistani army said he expected the clashes to continue until the insurgents were defeated.
"We needed to take tough action against a handful of these extremists who are trying to defy the government's writ and terrorise local people," he told AFP news agency.
After clashes erupted, militants captured and beheaded six security officials and killed seven civilians.
Sunday's fighting took place near the town of Mingora, after militants fired at paramilitaries, the Pakistani army said.
"People are leaving their homes. All shops and markets are closed," a scared resident told Reuters.
"The police and Frontier Corps troops have taken positions in high buildings," he added.
Swat is one of a number of areas near the Afghan border where militants have been stepping up attacks in recent months.
The violence has increased since the security forces stormed the radical Red Mosque in the capital, Islamabad, in July, leaving more than 100 people dead.