The Pakistan army battled through mountain passes today in a third day of fighting to evict Taliban fighters from a strategic valley.
The militants were still controlling parts of Buner valley, just 100 km northwest of the capital, Islamabad, though troops had secured the main town of Daggar yesterday after helicopters dropped them behind enemy lines.
US president Barack Obama told a news conference in Washington today that Pakistan's army had begun to realise that homegrown militants and posed a bigger current threat to the Muslim nation's stability than India, despite three wars between the two old rivals.
"On the military side, you're starting to see some recognition just in the last few days that the obsession with India as the mortal threat to Pakistan has been misguided, and that their biggest threat right now comes internally," Mr Obama said.
"And you're starting to see the Pakistani military take much more seriously the armed threat from militant extremists."
The Taliban's creeping advance from their stronghold in Swat valley, unnerved many Pakistanis and raised fears in Washington that its nuclear-armed ally was becoming more unstable.
Mr Obama said he was confident about the security of Pakistan's nuclear arsenal.
Pakistani troops used helicopter gunships and artillery today to target militants hideouts in Buner, and hundred of families were seen streaming out of the valley, their vehicles laden with whatever belongings they could carry, including cattle.
"We are leaving but we don't know where we will be going. There was shelling over my village the whole night," said an old woman, her head and face covered, as she sat on the back of a pick-up truck.
Military spokesman Major-General Athar Abbas said security forces has won control of at least two passes, but were having to move carefully because of roadside bombs.
He also delivered a warning to the Taliban in Swat for failing to keep their side of the bargain after the government accepted demands to establish Islamic sharia courts across the Malakand Division of North West Frontier Province, which includes Swat, Buner and several other districts.
"The terrorism, terrorising of people of the area is continuing unabated and this we consider a gross violation of peace deal," Maj-Gen Abbas told a news conference in Rawalpindi, the garrison town neighboring Islamabad.
He said the militants had refused to disarm, had abducted security forces personnel and killed policemen and civilians.
S officials have urged Pakistan to follow through on this week's offensives in Dir and Buner rather than let the enemy regroup, and speculation was mounting that once the army has secured Buner it will turn its attention to the Taliban in Swat.