Government troops laid siege to three towns in southern Afghanistan where remnants of the Taliban were hiding, engaging in a fierce gunbattle that left at least 40 Taliban fighters and seven soldiers dead, a senior official said.

Militants are still hiding on a south east Afghan mountain range despite a careful cave-clearing operation by US forces, according to American troops who have spent days trying to capture enemy forces.

ABOUT 200 US special forces and their allies were battling rebels in southeast Afghanistan yesterday in the heaviest fighting since Operation Anaconda nine months ago.

At least five people are reported to have died, and over 30 have been injured following an explosion in Afghanistan.

A Taliban security official says a captured Canadian freelance journalist has been released.

As UN talks on the future of Afghanistan began in Germany, US Marines expanded their base of operations in southern Afghanistan, sending out heavily armed patrols.

One key Taliban base may now have been captured and forces could be closing in on another.

The United States and its allies were today moving to seal off potential escape routes - even at sea - for terror chief Osama bin Laden.

The Taliban have lost contact with Osama bin Laden and he is no longer under the militia’s control, the spokesman for the movement’s supreme leader said today.

The Taliban has vowed to stay in its spiritual home in Kandahar despite reports that there were plans for a withdrawal.

The military chief of Osama bin Laden's al-Qaida network was killed along with seven colleagues in a US bombing raid three days ago, a Taliban official has confirmed.