More than 100 militants have been killed in four days of heavy fighting in a tribal area near Pakistan's border with Afghanistan, officials say.
Pakistan said nine of its soldiers were killed in the battles in Bajaur.
Fighter jets, helicopter gunships and artillery were all reportedly used to pound the militants' positions in the strategically important area.
The Pakistani Taleban say that only seven of their men died. Neither claim has been independently verified.
Security has deteriorated sharply in recent weeks along the frontier, which the Afghan government and Nato say is a haven for al-Qaeda and Taleban militants.
Talks between Pakistan's new government and Taleban leaders broke down in June.
Bajaur civilians were evacuated as fighting raged over control of a strategically important post near the Afghan border.
On Friday the security forces - members of the frontier corps - pulled back from the position.
Bajaur civilians were evacuated as the fighting raged
They moved to Khar, the main town in the Bajaur tribal agency, to where the Taleban are reported to have followed them.
The militants have now surrounded the town, according to a government official in Khar, who spoke to the BBC's Urdu service on condition of anonymity.
This is all further troubling evidence for Pakistan's military and government that the Taleban threat continues to grow, reports the BBC's Mark Dummett from Islamabad.
One soldier told the BBC Urdu service by telephone that a number of troops had been taken hostage by the Taleban insurgents.
"One of my men was killed on the spot when the Taleban attacked us, while four went missing. The rest of us laid down our arms and were captured," said the man, who identified himself as Subedar Ghausuddin.
There is mounting US pressure on the Pakistani government to crack down on militants who use the border region to launch cross-border raids into Afghanistan.