Troops loyal to Ivory Coast's Alessane Ouattara were engaged in fierce gun battles Friday in Abidjan with forces belonging to strongman Laurent Gbagbo in their final push for control of the country.

Internationally recognised president Ouattara's forces swept into the economic capital Thursday, demanding a cornered and increasingly isolated Gbagbo hand over power and warning he faced a bloodbath if he did not.

As the embattled leader remained silent, machinegun-fire and heavy artillery resounded in the administrative district of Plateau, shaking the walls of buildings, according to AFP journalists.

A plume of smoke rose into the sky near the presidential palace and streets were deserted as terrified residents remained indoors.

A Swedish United Nations employee was shot and killed, probably by a stray bullet, the Swedish foreign ministry said Friday.

UN chief Ban Ki-moon appealed to both sides not to seek "revenge" for past attacks as support for Gbagbo appeared to crumble.

"The secretary general urges all to exercise maximum restraint, refrain from exacting revenge and place the interests of the whole nation above all else," a spokesman for Ban said in New York.

Several hundred people have been killed in the aftermath of the presidential election in November and the UN estimates a million people have fled Abidjan fearing a bloodbath.

In the chic northern suburb of Cocody, fierce fighting broke out around the perimeter of the presidential palace around 10:00pm Thursday, described by one resident as "the final assault".

"The shooting doesn't stop. Gbagbo's men are resisting in all their positions," another Abidjan resident told AFP.

"We are hearing deafening artillery fire, RPG7s (rockets) and machine guns," he said.

It was impossible to confirm if Gbagbo was still in his home.

Pro-Ouattara fighters poured into Abidjan on Thursday after meeting little resistance in a four-day offensive against the Gbagbo-controlled Ivory Coast army.

The political capital Yamoussoukro and the world's biggest cocoa exporting port of San Pedro fell in quick succession.

They seized the airport and the state television on Thursday night, cutting Gbagbo's key communication channels. UN troops had since taken control of the airport.

Ouattara's government on Thursday closed all land, sea and air borders to stop Gbagbo and his allies from fleeing the country, and decreed a nightly curfew from 2100 GMT to 0600 GMT until Sunday.

Around 500 foreigners had taken refuge at the headquarters of the French military force in Abidjan.

"Some 150 French nationals and 350 other (non-Ivorian) foreigners were admitted to the camp in Port-Bouet" in the south of the city, French military spokesman Thierry Burkhard told AFP in Paris.

"Some of them arrived by their own means and others were accompanied" by French forces who have been patrolling parts of the capital to protect French citizens since Thursday.

Questions remained Friday over the likelihood of Gbagbo surrendering. The 65 year old, who has refused to cede power since losing the election, has been in power since 2000.

"He has no intention of resigning, he will not abdicate, he will take the resistance to the Ivorian people," a Gbagbo spokesman Toussaint Alain told AFP.

While his army chief of staff fled to the South African ambassador's home, rumours Gbagbo would follow suit have been swiftly denied.

"This is the first time I'm hearing about that," South African foreign ministry spokesman Clayson Monyela said of the rumours on Gbagbo.

The bloody post-election dispute has plunged the world's top cocoa producer into political and economic crisis, with nearly 500 already killed and up to a million having fled their homes prompting a dire humanitarian crisis.

"Laurent Gbagbo must step down to avoid a bloodbath. Hopefully he will or we will go and fetch him," Ouattara's prime minister Guillaume Soro told AFP in a telephone interview from Yamoussoukro.

He said that if Gbagbo did not resign after 10 years in power "we will go and fetch him and he will face international prosecution".

Several international organisations have accused Gbagbo and his allies of possible crimes against humanity for atrocities commited against civilians.