By Charles Bamba and Tim Cocks
BOUAKE/ABIDJAN, Ivory Coast (Reuters) - Ivory Coast rebels said they captured the western town of Toulepleu from forces loyal to Laurent Gbagbo on Sunday, but Gbagbo's military said fighting continued.
A post-election standoff between the incumbent leader and his rival Alassane Ouattara has led the northern rebels to push south in the heaviest fighting since they tried to topple Gbagbo in a 2002-2003 civil war. They took two smaller towns a week ago.
"Since 1410, the town of Toulepleu has been under the control of the New Forces (anti-Gbagbo rebels). We managed to seize some arms," Mara Lassine, military spokesman for the rebels in the western zone, told Reuters by telephone.
Gbagbo's military said fighting was continuing for the town, which is not strategically significant.
"The combat continues and its difficult to know the toll," said an Ivorian army captain who could not be named. "There are a lot of displaced. But the town is not yet taken. There is still fighting going on."
Residents in Liberian border villages told Reuters by telephone that gunfire was heard overnight Saturday and into Sunday, and wounded fighters were crossing over, seeking medical attention.
"We in Tapeta, here, did not sleep last night from the sounds of the guns (in Ivory Coast)," a Red Cross official said, asking not to be named.
"It sounded like the war was moving into this area."
Since a disputed November election, turmoil in Ivory Coast has killed hundreds and drastically cut exports from the world's top cocoa grower.
The standoff has escalated into open armed conflict in the west and parts of the main commercial city Abidjan, and fears of another civil war have pushed cocoa futures to 32-year highs.
Gbagbo claims he won the poll despite U.N.-certified results showing Ouattara with an eight-point margin of victory.
Tens of thousands of people have fled Ivory Coast to Liberia, and analysts are worried Ivory Coast's instability could spill over into its fragile neighbors.
Yao Yao, head of Gbagbo's paramilitary Front for the Liberation of the Greater West (FLGO), told Reuters by phone that fighting for Toulepleu had been going on since 5 a.m.
Ivorian troops and youth supporters loyal to Gbagbo have pillaged houses of officials from Ouattara's parallel government, the officials claimed on Sunday.
Gbagbo's "Young Patriots," often armed with machetes, clubs or guns, have set up roadblocks all over the main city in Abidjan after a call by leader Ble Goude to hunt pro-Ouattara rebels and obstruct U.N. staff, whom he accuses of backing them.
Some have used the them to rob motorists and two U.N. staff have been kidnapped but later released.
As the crisis wears on, relations between Gbagbo and the U.N. peacekeeping mission, with whom he is furious for recognizing his rival's election win, have worsened.
Gbagbo's interior minister Emile Guirieoulou, at a news conference on Saturday, accused U.N. troops of arming rebels.
On the same day, the U.N. said it was boosting its force, whom Gbagbo has told to leave, by 2,000 soldiers and had received two combat helicopters.
(Additional reporting by Charles Bamba in Bouake and Ange Aboa in Abidjan and Alphonso Toweh in Monrovia; Writing by Tim Cocks; Editing by Richard Valdmanis)