Civilians are desperate to escape the fighting in Swat
Thousands of civilians are reported to be fleeing their homes in Pakistan's Swat valley where a peace deal with the Taleban looks increasingly fragile.
More than 40,000 people have so far fled from clashes between the army and militants in Swat, officials say.
Fighting erupted on Tuesday night in Mingora, Swat's main town, where the Taleban defied a curfew, they add.
Pakistan's army says it killed more than 60 militants in Swat and neighbouring Buner on Wednesday.
Bedraggled men, women and children are fleeing the area to settle in camps set up by the government with UN help.
The army says that at least two soldiers died in fighting on Wednesday and accused militants of robbing three banks in Mingora.
It says that the Taleban have also planted roadside bombs in various areas of Swat to inflict maximum damage on the security forces.
A curfew remains in place in Mingora
Army helicopter gunships have pounded emerald mines in the Shahdara area, near Mingora, which are being operated by the militants.
Local people and journalists say 20 civilians who lived in a settlement near the mine also died in the attack, while many others were injured in a separate air strike.
While civilians strive to flee Mingora and its adjoining areas, some are reported to be trapped by the fighting and the curfew.
Three members of a single family were killed when a mortar fell on their home in Mingora's Bacha Saib locality during one of these battles, officials say.
They say that in addition at least 85 children have been trapped in a Mingora orphanage for the last two days.
Locals say the army continues to rely on long-range weapons and artillery to target the militants, but the Taleban have complete control on the ground.
They say the militants are now entrenched and ready for a long battle.
"More than 40,000 have migrated from Mingora since Tuesday afternoon," Khushhal Khan, chief administration officer in Swat, told the AFP news agency.
The North West Frontier Province (NWFP) government is now rushing to provide shelter for 500,000 people they expect to flee Swat over the next few days.
The NWFP Information Minster, Mian Iftikhar, said that the breakdown of the peace deal rested solely with the Taleban.
"They are entirely responsible for the situation today," he told a crowded news conference in Peshawar.
"The government went to great lengths to resolve the matter through dialogue.
"This was despite great international pressure to take action against the militants.
"But they refused to lay down their arms and continued patrols in the [Swat] valley, despite the implementation of Sharia law."
Mr Iftikhar also accused the Taleban of attacking military convoys and kidnapping government officials.
Taleban spokesman Muslim Khan responded by claiming that the militants control "more than 90%" of Swat.
He blamed the latest deaths on the security forces.
"If the government launches an operation against us we will give them a fitting reply, which it will remember for a long time," he told the AFP news agency.
The renewed tension in Swat comes before US President Barack Obama meets President Karzai of Afghanistan and President Zardari of Pakistan in Washington.
The BBC's M Ilyas Khan in Islamabad says that the events in Swat have come full circle since a peace agreement was signed with militants earlier this year.
Last week the government set up higher Islamic courts in the Malakand region - of which Swat is a part - to meet a key demand of the militants.
But the government's appeals to the militants to disarm - which they say was agreed in the peace agreement - have fallen on deaf ears.