TANK, Pakistan - Pakistani forces backed by artillery attacked Taliban insurgents on Monday as the army moved to wrest control of militant strongholds in a lawless region on the Afghan border.

The fighting is a new test of the government's determination to tackle an increasingly brazen insurgency that has seen a string of attacks in different parts of the country, including an assault on army headquarters, in which more than 150 people were killed.

The army said on Monday afternoon 18 militants and two soldiers had been killed in the past 24 hours, taking the militant toll to 78, while nine soldiers had been killed since the long-awaited offensive began early on Saturday.

There was no independent verification of the tolls.

The conflict in a global hub for Islamic militants is being closely followed by the United States and other powers embroiled in Afghanistan, and on Monday General David Petraeus, commander of U.S. forces in the region, was in Pakistan for talks.

About 28,000 soldiers are battling an estimated 10,000 hard-core Taliban, including about 1,000 tough Uzbek fighters and some Arab al Qaeda members.

The army says it has surrounded the militants in their main zone and soldiers were attacking from the north, southwest and southeast.

But the militants have had years to prepare their bunkers in the land of arid mountains and sparse forests cut through by dried-up creeks and ravines.

Military spokesman Major General Athar Abbas said soldiers had captured high ground around the small town of Kotkai, while a senior government official based in the town of Tank said forces had faced surprisingly light opposition, for now.

Resistance has been less than expected as the area where the fighting has been going on is barren and it's easy to hit them with helicopter gunships, said the official, who declined to be identified.

But as soon as they get into forest-covered areas, we're expecting a real battle.

Nearby, trucks escorted by machine gun-mounted jeeps rumbled up the road carrying soldiers and supplies toward the front.

Foreign reporters are not allowed into the area, and it is dangerous for Pakistani reporters to visit. Many of the Pakistani reporters based in South Waziristan have left.

More than 100,000 civilians have fled from South Waziristan in anticipation of the offensive, with about 20,000 coming out in the last few days. Up to 200,000 people could flee, an army officer said.

STOCKS SLIDE

While investors in Pakistani stocks have become used to militant attacks, the violence over the past two weeks has made them nervous and stocks fell sharply on Monday, ending 4.34 percent down at 9,411.29 points.

There are concerns about security because of the Waziristan offensive though I think the market over-reacted today, said Mohammed Sohail, chief executive of brokers Topline Securities.

The army has launched brief offensives in South Waziristan before, the first in 2004 when it suffered heavy casualties before striking a peace pact.

But this time analysts say the army, the government and the general public all agree the time has come to deal with the Pakistani Taliban.

Though the military is determined, the offensive could be its toughest test since the militants turned on the state, and the army will be hoping Afghan Taliban stay out of the fight.

Analysts expect militancy to weaken as members of the main Pakistani Taliban faction are squeezed out of their stronghold.

When forces take over Waziristan then you will definitely see the resistance waning, said retired Brigadier Asad Munir, a retired Inter Services Intelligence officer, who said he expected the offensive to take at least six weeks.

He said the militants may initially intensify bomb attacks in cities but once cleared from their strongholds their basic capability of training and launching people in different parts of Pakistan ... is going to be diluted.

The civilian exodus is not expected to produce a humanitarian crisis similar to one this year when about 2 million people fled from an offensive in the Swat valley northwest of Islamabad.

Many of South Waziristan 500,000 people have houses on government-controlled lowland to the east. People traditionally head to Waziristan in the summer with their flocks.

(Additional reporting by Hafiz Wazir and Zeeshan Haider; Editing by Ron Popeski)

Pakistan Afghanistan