Pakistan's army says its troops are battling militants in the streets of the main town in the Swat Valley.
Military spokesman Major-General Athar Abbas told reporters Saturday that troops have entered Mingora and are fighting to capture the town from the Taliban insurgents who control it.
Pakistani troops have been advancing toward the town for days. Thousands of civilians began fleeing Mingora last week in anticipation of intense fighting.
The United Nations says the fighting in northwest Pakistan has caused the greatest displacement of people the world has seen in two decades.
U.N. humanitarian coordinator Martin Mogwanja said Friday nearly two million people have fled Pakistan's military offensive against the Taliban.
The United Nations is appealing for an additional $454 million in aid, with Mogwanja saying "responding now is in the interest of the whole world." About $224 million has already been pledged.
Pakistani troops launched the operation in Swat Valley after militants violated a peace deal and advanced within 100 kilometers of the capital.
Pakistani officials say the month-long operation has killed more than 1,000 militants and more than 50 soldiers.