Authorities sent 2,500 paramilitary troops to Swat to fight supporters of Fazlullah, who is the leader of the banned Tehrik Nifaz-e-Sharia Mohammedi, or Movement for the Enforcement of Islamic Law.
Hundreds of people used Monday's truce between to flee Swat, one of the country's favourite tourist destinations.
Residents said they had not heard any gunfire since Monday, though traders were still reluctant to open their shops.
Fighters in Swat and elsewhere have been targeting security forces for the past several months.
The violence escalated last Thursday when a suicide bomber attacked a military truck in Swat, killing 20 people.
Badshah Gul Wazir, the home secretary of North West Frontier Province, which includes Swat, said more than 60 fighters had been killed in fighting on Sunday.
He said 20 security forces and civilians had been killed since Friday, but gave no other details. Another eight troops and four police were missing, he said.