Militant activity usually drops significantly in the winter months, and any reduction in fighting in the mountainous Bajur frontier region could lead to fewer cross-border attacks.

'There's been a dismantling of the militancy, it's not seasonal.

They have lost,' Major General Tariq Khan told reporters flown to the area by military helicopter. 'Their resistance has broken down.'

A Pakistani military offensive that began in August has killed more than 1,500 people - almost all militants according to the army - and forced hundreds of thousands of residents to flee to safer areas.

The army says the Taleban had set up a mini-state with its own courts and tax systems in Bajur, the most northerly of Pakistan's semiautonomous tribal areas, and that it had become a gateway for militants entering Afghanistan.

Pakistan's military showcased its gains in the area just as it faces criticism for failing to dislodge militants from the nearby Swat region and amid concern that growing political turmoil in the country will undermine its resolve to tackle extremism.

Troops and insurgents are observing a cease-fire in Swat, a scenic valley once popular with tourists, while the commander of the Taleban considers a proposed peace deal that the United States and Nato worries could turn the region into a militant haven.

American commanders say the Afghan province of Kunar which borders Bajur is still one of the most treacherous areas for their soldiers. The US has earmarked it for some of the thousands of reinforcements being deployed to Afghanistan this year.

Both Bajur and Kunar have been mentioned as possible hiding places for Al-Qaeda chief Osama bin Laden.

Khan, who commands the paramilitary Frontier Corps, said his troops now control Bajur's roads, making it impossible for militants to move freely.

However, he acknowledged that five top militant commanders managed to flee the region, possibly to Afghanistan. -- AP