(Repeats to fix typo in headline)

By Mian Khursheed

KHWAZAKHELA, Pakistan, May 22 (Reuters) - Pakistani tribesmen near the Swat valley are raising militias to prevent the Taliban from expanding their influence in the region, a senior military commander said on Friday.

Pakistani military launched an offensive in the scenic valley and neighbouring districts this month to stop a widening Taliban insurgency that had raised fears for nuclear-armed Pakistan's future.

Pakistani officials say more than 1,000 militants and more than 50 soldiers have been killed in the fighting that has driven about two million people out of their homes in the biggest ever displacement in Pakistan's 61 years of nationhood.

Major-General Sajjad Ghani, who is leading the offensive in the upper part of Swat valley, said people in neighbouring Kalam valley and Lower Dir district were raising their owm militias, commonly known as lashkars, to confront the militants.

"They are resolutely defending against the advance of the Taliban. That's the silver lining that I can see," he told reporters during a trip to Swat arranged by the military.

In a sign of growing hostility, villagers in Kalam and Lower Dir have tried to expel the gunmen.

Several people were killed or wounded in a clash between armed villagers and Taliban fighters in Kalam on Thursday, provincial assembly member Jafar Shah told Reuters.

Villagers had made a similar stand in parts of Lower Dir, to the west of Swat, and the Taliban had pulled out of some areas, a provincial government official there said.

"Today they stand isolated, not only in the valley but also at the national scene. I think this is a big achievement of the government as well as the military," military spokesman Major-General Athar Abbas said.

Politicians and members of the public broadly back the military offensive in Swat but analysts say support could quickly disappear if many civilians are killed or if the displaced languish in misery.

Ghani said civilian casualties were "less than double figures" in areas under his command.

HUMANITARIAN CRISIS

Nearly 1.7 million people have been displaced by the offensive, while about 555,000 people were forced from their homes by earlier fighting in the region.

The United Nations has warned of a long-term humanitarian crisis and on Friday appealed for $543 million for the people enduring "incredible suffering".

The U.N. appeal came a day after Pakistan's allies promised $224 million in aid for the displaced, including $110 million from the United States, after the government warned that the militants could exploit a failure to help.

Ghani said two major militant strongholds had been secured in upper Swat and people who had fled the area would soon be asked to return to their homes.

Ghani said the military was determined to eliminate the Taliban and ruled out the possibility of any talks or a ceasefire with the militants.

"This time it has been decided to take the operation to its logical conclusion aimed at eliminating the terrorists," he said.

About 15,000 members of the security forces are fighting between 4,000 and 5,000 militants in Swat, the military says. The United States, which sees Pakistan as vital to its plan to defeat al Qaeda and bring stability in Afghanistan, had criticised Pakistan's policy of making deals with the militants but has applauded Pakistan's recent resolve to fight what some U.S. leaders have called an "existential threat" to the country. (Writing by Zeeshan Haider; Editing by Paul Tait)

AlertNet news is provided by