Large caliber assault guns and self propelled artillery pieces are your friend in an urban environment. Liberal use of the 'Z' key (indirect fire by direct fire weapons) combined with adjacent hex splash damage of large caliber weapons can suppress units hiding in a cluster of buildings. Machine guns may also be a bit of help - the medium or heavy crew served ones, since they have splash damage with indirect fire.
In many cases though, unless they are sitting atop an objective hex, it may be better to bypass them.
First of all,decide your objectives,how deep you will go and where to stop.
It's your decision after all
Urban fights are very ugly affairs,i usually avoid them or make it limited battle.