US and Afghan forces have surrounded at least two senior Taleban commanders in southern Afghanistan after three days of intense fighting, officials say.
US-led coalition forces are fighting alongside Afghan troops
They say more than 100 Taleban fighters have been killed in one of the biggest offensives in two years.
Hundreds of Afghan troops backed by US-led coalition forces have taken part in the clashes in Zabul province that started on Tuesday.
The Taleban deny having lost any of their men.
On Tuesday, the pilot of a US spy plane was killed when his aircraft crashed while returning to its base in the United Arab Emirates from Afghanistan.
It is not clear whether the plane had been involved in the offensive.
Reports say Afghan and US forces have laid siege to an area in which senior Taleban commanders are believed to be hiding.
They are believed to include Mullah Dadullah and Mullah Brader - both of whom are said to be close to Taleban leader Mullah Omar.
Most of the fighting has taken place in the Daychopan district of Zabul province, near the border with Kandahar.
"We have 103 bodies," Afghan interior ministry spokesman Lutfullah Mashal is quoted as saying by Reuters news agency.
"All of them were armed. Most were killed by coalition helicopter gunships," he said.
A British military spokeswoman, Lt Gemma Fullman, said British planes provided close air support but did not drop any munitions, the AFP news agency reports.
Afghan police commander Gen Salim Khan said eight Afghan security force members had died. The US military said five US soldiers had been wounded.
Taleban spokesman Latifullah Hakimi denied any of the group's fighters had been killed or captured.
Wave of violence
The fighting began after Afghan and coalition forces were attacked by rebels with small arms and rocket-propelled grenades on Tuesday, according to a US military statement.
The forces were patrolling an area south-west of Daychopan, near the border with Kandahar province, when the attack took place.
Tuesday's incident follows a wave of violence earlier this week in which at least 38 rebels were killed in clashes with US-led coalition and Afghan forces in southern Afghanistan.
The BBC's Andrew North in Kabul says doubt has been cast on some of the US military's previous claims about insurgent casualty numbers.
But our correspondent says barely a day goes by now without serious violence across south and east Afghanistan, raising fears for security in September's planned parliamentary elections.
The US has about 18,000 troops in Afghanistan tackling remnants of the Taleban regime that was ousted in late 2001.
Nearly 400 people have been killed in Taleban-linked violence this year, following a lull during the winter - most of them suspected militants, but also about 30 US troops.