French forces have snatched the Japanese ambassador to safety from near the besieged presidential residence in Ivory Coast's main city, Abidjan.
Soldiers exchanged fire with guards at the compound where Laurent Gbagbo is holed up, refusing to stand down.
His rival Alassane Ouattara's forces surround the residence, where fighting continued through the night.
French Foreign Minister Alain Juppe says Israel has now asked Paris to extract Israeli diplomats from Abidjan.
Mr Gbagbo has refused to step down despite being beaten in an election in November.
'A lot of blood'He says he won, but the Ivorian election commission found that he lost and the UN certified that result.
Analysis
A negotiated ending might have helped ease tensions in this bitterly divided country. After all, Mr Gbagbo won 46% of the vote in the recent election.
But he seems to have overplayed a weak hand, and so a more forceful denouement beckons, and with it the real risk of greater instability.
What will his militias do if Mr Gbagbo is killed, or dragged out and humiliated?
Civilians, still trapped in Abidjan, say there has been sporadic gunfire across the city, with pro-Gbagbo militias still on the streets, and Ouattara force's still "mopping up" opposition at several military installations.
The stench of dead bodies, littering the sides of the road, is a powerful reminder of the price this city has paid for the "restoration of democracy".
The ballot had been intended to reunite the former French colony, which split in two following a northern rebellion in 2002.
After months of negotiations, pro-Ouattara forces last week swept south to Abidjan.
The BBC's Andrew Harding, near the city, says it was lit up by explosions overnight, with much but by no means all the fighting around the presidential residence.
He says although Mr Gbagbo's senior generals have given up the fight, his armed supporters continue to put up strong resistance in several neighbourhoods.
On Wednesday, pro-Ouattara forces were driven back after launching what they said would be a decisive assault on the presidential compound.
Mr Gbagbo says his rival's troops want to kill him, but they say they have strict orders to capture him alive.
Late on Wednesday, French helicopters moved in to evacuate the Japanese ambassador, Okamura Yoshifumi, after his home near the presidential residence was invaded by unidentified gunmen.
The envoy and his aides were whisked to safety in a French military camp at Port-Bouet, south of Abidjan, the French embassy said.
The French said they had acted after a request from Japan and the UN.
During the operation, French forces exchanged fire with fighters defending Mr Gbagbo's residence.
A number of other diplomatic missions are based in the besieged area.
France has had troops in Ivory Coast alongside UN peacekeepers since the country's civil war almost a decade ago.
Mr Yoshifumi told AFP news agency a group of "mercenaries" had occupied his residence for five hours.
He said the gunmen had launched rockets and fired machine-guns and cannon from the building, while he and others sheltered in a room.
The envoy said he later found four employees, security guards and a gardener, were missing and there was "a lot of blood" in the house.
Civilians under siegeSpeaking by phone to French radio on Wednesday, Mr Gbagbo denied he was hiding in a bunker.
Ivorian turmoil
- 28 November: Incumbent Laurent Gbagbo and challenger Alassane Ouattara in election run-off
- 2 December: Electoral commission announces that Ouattara won 54% of vote
- 3 December: Constitutional Council declaring Gbagbo the winner; UN says Ouattara was victor
- 30 March: Pro-Ouattara forces enter the capital, Yamoussoukro
- 4 April: UN launches air strikes on Gbagbo in main city, Abidjan
- 5 April: Three generals negotiate Gbagbo's surrender
"I am in the residence - the residence of the president of the republic," he said.
Earlier he rejected claims he was surrendering, saying he was only negotiating a truce.
French Foreign Minister Alain Juppe said Mr Gbagbo's "intransigence" had stopped UN-brokered talks to negotiate an orderly departure.
On Monday, UN attack helicopters bombarded Gbagbo arms sites in Abidjan, including inside the presidential compound.
Pro-Gbagbo forces had been accused of firing heavy weaponry at UN peacekeepers and into areas of the city that voted for his opponent.
As the rival presidents' forces continue to fight over the presidency, concern is growing over the humanitarian situation in Ivory Coast.
The battle for Abidjan has now been raging for a week and it is unsafe for many of the city's four million people to go outside.
The main banks have been closed for nearly two months and few people have the funds to stock up on food.
The UN refugee agency reports an increase in the number of Ivorians crossing the border into neighbouring Liberia.
The International Criminal Court says it will investigate reports of human rights abuses by both sides during the fighting, which has left hundreds dead.
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