Pakistani troops and helicopter gunships targeted Islamist militant hideouts in the Swat Valley today, the military said, after fierce fighting killed 50 militants and 10 soldiers in the past 24 hours.
Countering growing violence is a test for a fractious coalition government engaged in infighting after Pervez Musharraf quit as president last week.
Security concerns, uncertainty over the government's future and worry about the economy have undermined investor confidence and sent the country's financial markets on a downward spiral.
The clashes in mountainous Swat in Pakistan's northwest erupted after militants attacked a security patrol and a suicide car bomber killed eight policemen elsewhere in the valley.
"Fighting is still going on. We hit and destroyed over 40 militants' bunkers and a training camp," said Major Nasir Ali, military spokesman in the region. "We have confirmed reports that 50 militants were killed while 10 of our soldiers were martyred."
He said the number of militants' deaths could be higher as many bodies had been taken away.
Residents in Kabal, about 20 km west of Mingora, the region's main town, said intermittent mortar bombing by security forces has continued since yesterday while Cobra helicopter gunships carried out strikes this morning on militants' positions in the mountains. Seven villagers were killed and three wounded in mortar bombing, residents said.