Pakistani troops took  the main town in strategically important Buner Valley on Wednesday after dropping by helicopter behind Taliban lines, killing over 50 militants in two days of fighting, the military said.

The Taliban's advance earlier this month into a region just 100 km (60 miles) northwest of the capital had sent shivers through Pakistan and heightened fears in the United States that the nuclear-armed Muslim state was becoming more unstable.

"We assure the nation that armed forces have the capability to ward off any kind of threat," military spokesman Major-General Athar Abbas told a news conference in Rawalpindi, the garrison town close to the capital, Islamabad.

Pakistan had used jet fighters at the start of the operation on Tuesday, as well as helicopter gunships.

"Last night after the airstrike, attack helicopters engaged the miscreants and inflicted more than 50 casualties," Abbas said, adding that one soldier had been killed in the operation.

The government's demonstration of military resolve will likely reassure US President Barack Obama and Afghan counterpart Hamid Karzai when they meet Pakistani President Asif Ali Zardari in Washington May 6-7 to discuss regional strategy.

Nevertheless, Pakistani stocks lost more than 2 percent due to worries over mounting insecurity.

Taliban fighters had held the entrances to the valley, but they risked being caught between security forces at their front and rear after the successful airdrop.

"The airborne forces have linked up to police and Frontier Constabulary in Daggar," the military spokesman said earlier. "A link up with ground forces is in progress."    

Residents saw troops rappel from helicopters outside Daggar, the main town in Buner, while firing and explosions were also heard intermittently.

The military spokesman said the soldiers had freed 18 of some 70 police and militiamen kidnapped by the militants on Tuesday.

Three members of an Al Jazeera television crew were wounded when they came under fire while reporting from Buner, the network's website said.

The military estimated some 500 militants were in the Buner valley of the North West Frontier Province, about 140 km (80 miles) southeast of the Afghan border, and that it might take a week to clear them out.

The military has said a few hundred militants holed up in the mountains never represented a real threat to the capital.

But, Ikram Seghal, a retired army officer turned analyst, said the Taliban could have used Buner to advance on Tarbela, a dam regarded as critical for water and electricity supplies, before reaching Islamabad.

"It is very important psychologically, tactically and strategically to make sure that Buner is cleared of these Taliban," said Seghal.

The Pentagon urged Pakistan to remain on the offensive. "The key is to sustain these operations at this tempo and to keep the militants on their heels and to, ultimately, defeat them," Pentagon press secretary Geoff Morrell said.

Washington is considering rushing hundreds of millions of dollars in emergency aid to Pakistan, the US Senate's second-ranking Republican, Jon Kyl of Arizona, told reporters.

Pakistan is desperate for military and economic aid to fight an insurgency that has washed back across the border from Afghanistan.

But allies had feared Zardari's government was too ready to appease the militants after he signed off on a regulation to introduce Islamic sharia courts in the Malakand division of North West Frontier Province.

The government had hoped that meeting demands for sharia courts would quieten the militants in Swat. But the Taliban instead became emboldened, fanning out of Swat into other parts of Malakand, including Buner, Lower Dir and Shangla districts. - Reuters