Pakistani aircraft bombed Taliban on Sunday in their bastion of South Waziristan on the Afghan border after the militants attacked two military camps, killing two soldiers, officials and residents said.

The military, near the end of an offensive in the northwestern Swat Valley after two months of fighting, is preparing to launch a new drive in South Waziristan, where Pakistani Taliban chief Baitullah Mehsud is based.

The decision to go on the attack against the militants came after Taliban gains raised fears of the militants gradually taking over more of the country and even posing a risk to Pakistan's nuclear arsenal.

The campaign has broad public support and has also won the praise of close ally the United States, which needs Pakistan to go after the militants as it tries to defeat Al Qaeda and stabilise Afghanistan.

Sunday's air strikes were on two villages in Laddah district, a Mehsud stronghold, and two militant compounds were destroyed, said a government official and residents.

"It was a heavy bombing. Two militant compounds and several houses have been completely destroyed," said the government official in South Waziristan's main town of Wana, who declined to be identified.

The air strikes came after militants attacked an army and a paramilitary camp east of Wana on Saturday night, killing two soldiers and wounding four, said the government official.

Intelligence officials later said eight militants had been killed.

The government has said Mehsud, who carries a $5 million US reward on his head, and his force of thousands of followers must be defeated.

The government posted in a newspaper on Sunday a reward of 50 million rupees ($615,000) for Mehsud, and 75 million ($920,000 ) in rewards for 10 of his top men.

Mehsud, who security analysts say has become increasingly close to Al Qaeda, has been accused of a string of attacks in Pakistani towns and cities including the December 2007 assassination of former prime minister Benazir Bhutto.

Mehsud is allied with Afghan Taliban fighters but they concentrate on attacking US-led forces in Afghanistan and are not the focus of the Pakistani offensive.

With an increase in military attacks on Mehsud in South Waziristan, about 45,000 people have fled from the area, according to military estimates.

Nearly 2 million people have fled from fighting in Swat and other parts of the northwest since late last year but aid workers are not expecting a huge exodus from South Waziristan as the population there is relatively small.

Also, many people have winter homes on the lowland to the east and traditionally migrate to higher-altitude South Waziristan with their flocks for summer grazing.

High civilian casualties in the fighting would raise the risk of an erosion of public support for the offensive.

Prime Minister Yusuf Raza Gilani said on Sunday now was the time for decisive action against the militants, while a Taliban spokesman from Swat said they would never give up.

"We'll continue our fight until we achieve our goals," the spokesman, Muslim Khan, said by telephone.

Khan, who said he was speaking from Swat, said Taliban leaders were alive and determined to fight on.

"We retreated according to our plan. We'll carry out guerrilla attacks ... It's a long battle," he said. - Reuters