Residents of Pakistan's Swat Valley are reported to be fleeing their homes despite authorities rescinding an earlier order for them to leave.
A peace deal between the government and Taleban militants in the region appears close to collapse after the army said militants attacked police checkpoints.
There has also been heavy fighting to the west and east of Swat.
A major army operation against the Taleban appears likely within a few days, says the BBC's Syed Shoaib Hasan.
Our Islamabad correspondent says the army seems in an uncompromising mood, with the renewed violence apparently the death knell for the peace deal, which has held since February.
See a map of the region
In other violence, a suicide bomber killed four security personnel near Peshawar, North West Frontier Province.
Police said the attacker rammed an explosive-laden car into a military vehicle.
It is not yet known who is behind the attack, but Taleban militants are known to be active in the province.
Patrols
Pakistani Information Minister Mian Iftikhar Hussain said the government was preparing six camps to cater for up to 500,000 people fleeing fighting in the region, AP news agency reported.
The town of Dargai, near the Swat border, is reported to be where at least one camp is being built.
Armed Taleban fighters have been openly patrolling, the army says
A Pakistani military spokesman, Maj-Gen Athar Abbas, told the BBC the Taleban had violated all the norms of the peace deal in Swat Valley.
He said the Taleban had sent out armed patrols and had gone into the neighbouring Dir and Buner districts.
The army says militants attacked checkpoints and bases in four different locations in Swat, and that armed militants are openly patrolling the streets of the district's main city Mingora.
A witness in Mingora told AP that black-turbaned militants were deployed on most streets and on high buildings, and that security forces were barricaded in their bases.
Khushal Khan, district co-ordination officer in Swat, told the BBC that residents of areas around Mingora had been told to evacuate because there was a fear that the Taleban could use heavy weapons to attack security forces.
But he said the order was later rescinded when the attacks no longer seemed likely.
However, reports say residents are fleeing in their hundreds anyway, taking advantage of the government's lifting of a curfew.
Taleban spokesman Muslim Khan said that the militants were in control of "90%" of the valley.
He told AP that Taleban actions were in response to the army violating the peace deal. He said the peace deal had "been dead" since the army's recent offensive in neighbouring Buner district.
"Everything will be OK once our rulers stop bowing before America," he said.
Washington talks
The deteriorating situation in Pakistan's north-west came as President Asif Ali Zardari was preparing for talks in Washington on Wednesday.
Analysts say US President Barack Obama will seek assurances from Mr Zardari that his country's nuclear arsenal is safe from Taleban insurgents and that Pakistan intended to root-out militant groups and defeat them.
Militants fought the army in the region from August 2007 until this year's deal.
Under the deal the Taleban were expected to disarm.
The Taleban say they will not lay down their arms until Islamic Sharia law is fully implemented in Swat.
They have banned the playing of music in cars and are also using mosques to invite local youth to join them.
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