The International Crisis Group warned last week that civil war had broken out in Ivory Coast following a prolonged political stalemate.
Fighters loyal to Ouattara, dubbed the Republic Forces of Ivory Coast, said they were advancing on the western town of Duekoue, one of the strongholds of incumbent President Laurent Gbagbo.
"The fighting is quite serious," a spokesman for the pro-Ouattara forces was quoted by Bloomberg News as saying.
Gerard Araud, the French envoy to the United Nations, said the U.N. Security Council may consider referring the situation in Ivory Coast to the International Criminal Court, Voice of America reports.
Gbagbo refuses to step down despite a Security Council resolution recognizing Ouattara as the winner of a November presidential election.
The U.N. refugee agency said Friday that as many as 1 million people have fled violence in Abidjan, the commercial capital of Ivory Coast, since the elections in November. At least 450 people are reported dead.
In a Friday letter to European leaders, International Crisis Group President Louise Arbour called on the U.N. Security Council to authorize military action in Ivory Coast.