Rebels killed three army intelligence men in an ambush and also took hostage 30 police and paramilitary soldiers in a raid on their post earlier this week.
Imran Khan, Al Jazeera's correspondent, said the army has confirmed that it is mounting a major operation in the valley and that clashes between fighters and the Pakistan army have been "fierce", with casualties being reported on both sides.
"The army says they have killed 25 Taliban fighters but Muslim Khan, Taliban spokesman, led by cleric Fazlullah, denies this claim saying one man is dead and 5 are injured."
On Tuesday, rebels attacked a joint military-police post in the Kabal area, 35 km north-west of Mingora, Swat's main town, and captured 30 hostages, according to
“The hostage situation in Kabil Tehsil, Swat, continues. The army confirms that 30 are being held hostage. The Taliban claim 35."
Pakistani authorities signed a peace deal with the rebels in May, however the rebels have stepped up activity in recent weeks after accusing the government of failing to honour the accord.
"Amir Haider Khan Hoti, the chief minister of the North-West Frontier Province and Awais Ahmed Ghani, the governor of the province, met on Tuesday and ordered the security forces to mount a major operation against what they call "miscreants and criminals" in the Swat valley," he said.
The rebels say they will continue their campaign unless troops are withdrawn from the valley.
Muslim Khan, Taliban spokesman, says the NWFP should announce publicly that the peace agreement is not intact. He went on say if the troops are not withdrawn then further bloodshed cannot be avoided.
Swat had been a top tourist destination until rebels launched a campaign of violence last year to enforce Taliban-style Islamic law in the valley.