The fighting occurred in the Panjwayi district of Kandahar between U.S. troops operating under NATO command and the resurgent Taliban.
According to NATO officials, more than 200 militants have been killed in the four days of the offensive, which is the alliance's biggest ground operation to date. On Tuesday, NATO spokesman Major Scott Lundy told the Associated Press that the international force also had cornered an estimated 700 Taliban fighters in a region near the Panjwayi district and arrested 80 others.
"It's a complex battle space," said Lundy. "Some [Taliban] elements are fixed, others are moving."
Taliban leaders have rejected the NATO reports and questioned the legitimacy of the body count figures. They claim their casualties are closer to a dozen and that NATO forces killed many civilians.
NATO reported no civilian casualties.
An incident of friendly fire on Monday, however, left one Canadian soldier dead. A U.S. jet fighter mistakenly strafed Canadian troops, killing one and severely wounding five others. The incident is under investigation. The commander of the U.S. Central Command Air Forces called the error a "tragedy."
In total, five Canadian soldiers have died and 14 British troops were killed when their plane crashed during the offensive.
Labeled Operation Medusa, the offensive comes on the brink of a major meeting between NATO leaders and Afghanistan President Hamid Karzai to discuss how to stop the Taliban's resurgence in Kandahar. Pakistan President Gen. Perez Musharraf plans on joining the meetings later this week.
Pakistan agreed to a peace deal with Taliban sympathizers in the North Waziristan province on the border with Afghanistan. Under the accord, local tribesman will expel the Afghani militants in the region and cease fighting across the border in exchange for the reduced presence of Pakistani troops in the region.