About 300 Taliban militants believed to be holed up in a district north of Kandahar City were under siege on Wednesday, surrounded by Canadian troops fighting alongside Afghan and coalition forces, NATO officials said.

In three days of intense firefights in the Arghandab district, coalition and Afghan national forces have so far killed 50 Taliban fighters and wounded 50 more, authorities said.

Casualties on the coalition side included one member of the Afghan army killed, as well as three Afghan national police officers, NATO said.

The Arghandab region, about 20 kilometres north of Kandahar City, is a strategic point sitting on a rebel infiltration path into the city. The insurgents massed their fighters there soon after Mullah Naqib, a leader known for keeping peace in the region, died of a heart attack this month.

Naqib had been a supporter of Canada's combat mission in Afghanistan, but his death created a leadership vacuum in the district, opening the way for the Taliban to overrun the area.

In a briefing to Canadian reporters on Wednesday morning, Canadian Forces spokesman Maj. Eric Landry described Arghandab as "a vital ground for insurgents" as well as "a vital ground for us."

"We want to make sure this district becomes secure for the population, but also that we have freedom of movement within the district. This means denying that same freedom of movement for the insurgents," Landry said.

'Key to the control of Kandahar city'

The CBC's Carolyn Dunn, reporting from Kandahar, described the mission as "critical" for the NATO coalition.

"Really, control of Arghandab is key to control of Kandahar City, that's the way people are looking at it," she said.

The region has played a role as a buffer zone around Kandahar City, "so you can imagine how very serious that can be if the Taliban seized control of the area," Dunn said.

Losing the battle could lead to destabilization of the city, she said.

Provincial police Chief Sayed Afgha Saqib said the Taliban had taken shelter in abandoned homes, but vowed to capture them. About 60 insurgents were arrested, reports said.  

Arghandab is "completely under our control," NATO spokesman Wing Cmdr. Antony McCord assured reporters during a briefing in Kandahar City.

'Not safe anymore'

Taliban spokesman Qari Yousaf Ahamdi would not comment on rebel casualties, but disputed the number of NATO casualties, saying they were underreported.

"We have killed seven police and burned three police vehicles," he said.

Reports said hundreds of Afghans abandoned their homes and fled south toward Kandahar, away from the two main villages occupied by the rebel militants as news spread of the impending battles.

A 32-year-old farmer from the region who goes by the name Abdul said he grew concerned when he spotted Taliban fighters entering the district. "I understood that sooner or later an operation would be in Arghandab," he said.

"I have my family toward Kandahar City. I have rented a house for my family and everything we had was left behind," he added, thanking Allah for keeping his family safe.

"The Taliban shouldn't have arrived here. It was one of the safest districts but it is not safe anymore," he said.

With files from the Canadian Press