Forces loyal to Alassane Ouattara, have marched into the major cocoa port of San Pedro.San Pedro is a strategically important town because it ships half the cocoa beans from the world's top cocoa grower.
The witnesses said that shooting erupted in the town overnight on Wednesday. One said he thought pro-Ouattara forces had already seized control of San Pedro's airport although this could not be independently confirmed.
The witnesses also told that shooting started at around 9 pm (2100 GMT) then the rebels' vehicles drive into the town.
The disputed election that was meant to draw a line under a 2002-3 civil war has instead reignited it, as rebels who control the northern half of the country and now back Ouattara advance south into Gbagbo's territory from all sides.
Pro-Quattara forces seized the official capital Yamoussoukro on Wednesday, and they have advanced thousands of miles in the east towards the main city of Abidjan, where analysts expect the fiercest battles will be.
Earlier, Captain Leon Alla, a defence spokesman for Ouattara, said his forces took control of Sinfra on Tuesday and Bouafle and Soubre, 130km north of San Pedro, on Wednesday.
Residents of Tiebisso, 40km north of the capital, also reported fighting.
Ouattara's prime minister Guillaume Soro told French radio Gbagbo had just "hours" to leave power peacefully.------