Heavy losses have been reported on both sides.
Blackened wrecks of military vehicles littered the roads and some were still burning on Wednesday after intense clashes between Pakistani forces and suspected al-Qaida fighters and local tribesmen sheltering them.
A charred body was in one of the vehicles in Watchadana, 12km from Wana town and near the Afghan border.
Pakistan said 16 paramilitary troops had been killed and 22 wounded, as the casualty figure continued to rise from Tuesday's operation.
At least 24 fighters, some believed to be foreign al-Qaida supporters, were killed in the heavy clashes involving artillery and rockets.
"Their features are not local. They appear to be Chechens or Central Asians," said Muhammad Azam Khan, a local government official in the tribal region.
Attackers set military vehicles ablaze while terrified townspeople streamed out of the remote tribal village of Kaloosha.
Mosque loudspeakers blared a warning from authorities that residents must leave the besieged village by 3pm (1000 GMT) because of the continuing violence. Many appeared to be heeding the call.
Colin Powell has praised
One resident who fled Kaloosha said hundreds of people from about 60 families had left the village of 6000 people in an exodus that began late on Tuesday.
The crackdown stirred anger in the region, which has resisted outside intervention for centuries and is an alleged hiding place for Usama bin Ladin.
Hundreds of paramilitary troops launched an operation against tribesmen close to the Afghan border early on Tuesday.
It was the bloodiest in a series of attacks by Pakistani forces in the country's semi autonomous tribal belt in recent months.
Security officials said 18 more troops were missing and there were fears they had been kidnapped.
"We don't know whether the missing men are dead, wounded or have been kidnapped by militants," said a security official, speaking on condition of anonymity.
Another official, who also asked not to be identified, said local authorities had been approached by fighters who demanded the release of prisoners in exchange for the missing men.
The raid began just a day after Pakistan's President General Pervez Musharraf promised to rid the territory of foreign fighters, and coincided with a visit to the region by US Secretary of State Colin Powell, who praised the action.
"We regret the loss of Pakistani life in this effort but it shows, I think, good intentions on the part of Pakistan not to allow these tribal areas to be used as a haven for the Taliban," said Powell.
He said he would discuss the Kaloosha operation with Musharraf on Thursday in Islamabad.
US forces are also engaged in an operation on the Afghan side of the border, dubbed Mountain Storm, to capture fighters, including bin Ladin and Taliban leader Mullah Umar.
Powell sidestepped a question about whether US forces would enter Pakistan while in "hot pursuit" of suspects fleeing Afghanistan, saying that "nothing would be done along the border that is not done in coordination with both sovereigns."
The subject of "hot pursuit" is a delicate one in Pakistan, where public opinion is strongly against allowing American forces onto national soil.