Troops on Tuesday searched for two pro-Taleban clerics accused of instigating the worst fighting near the Afghan border since the start of the "war on terror", officials said.
A tense calm prevailed amid a curfew in Miranshah, the main town in North Waziristan tribal area, where 140 militants died in days of fierce fighting that erupted on Saturday. There were only sporadic clashes overnight.
The bodies of some insurgents were lying around the military fort in the town, said one of the thousands of residents who have fled the town for the nearby village of Mir Ali.
The local administration has called tribal elders to hold talks on opening the main market and ending the violence, but one tribesman said a few were willing to risk reprisals from the Taleban by acting as go-betweens with the government.
"We cannot negotiate because we cannot speak on behalf of anyone," said Malik Inamullah, one of the elders, adding that the elders could not take responsibility to vouch for the Taleban not attacking.
"The fear of the Taleban is still strong among the tribal elders. They fear reprisals if they cooperate with the government," Inamullah said.
Army helicopter gun-ships continued to circle overhead and terrified residents had to sneak into nearby mountains to get out of Miranshah because the military has virtually sealed off the town, locals said.
A provincial government official in Peshawar, Sikander Qayyum, told the BBC that 140 militants had been killed in the three days of clashes that started Saturday during a visit to Islamabad by US President George W. Bush.
Security forces said they arrested seven suspects in overnight raids in Miranshah.
"We are desperately searching for the two main culprits, Maulvi Abdul Khaleq and Maulvi Sadiq Noor, but we still do not have any information about their whereabouts," a senior security official told AFP.
Khaleq, who runs a major seminary in Miranshah, had called for a "holy war" against the army after troops last week destroyed an al Qaeda training centre in nearby Saidgai village, officials said.
Khaleq's brother was among some 40 militants killed in the raid last Wednesday, they said. Troops were destroying living quarters at Khaleq's seminary on Tuesday, residents said.
Authorities also demolished a three-storey private hospital in Miranshah's main market on Tuesday. Officials said the militants launched attacks on security forces from the clinic.
Noor, who also runs a preaching centre and a seminary near Miranshah, joined forces with Khaleq and on Saturday hundreds of armed students occupied the main buildings in Miranshah and attacked military posts from several directions, the officials said.
The military says more than 100 died on Saturday and another 19 on Monday when troops backed by helicopter gun-ships seized control of the main bazaar and government buildings, forcing the militants into mountain hideouts.
Officials said Noor and Khaleq have been trying to impose strict Islamic laws in Miranshah and are closely linked to the Taleban.
A senior army official said that if the two were captured or killed, the resistance in Miranshah would die down.
Said Badshah, 35, who ran a private school, failed to return home late Monday in Barwan village, near Wana, a local administration official told AFP.
His headless body was found in a remote area on Tuesday evening, the official said on the condition of anonymity.
Officials suspect that militants were behind Badshah's murder as he had no known enemies in the area and he was the son of a pro-government tribal elder.