The latest clashes occurred in Kandahar province, bringing to about 300 the number of insurgents killed since the operation began a week ago, Nato says.

The fighting came as Nato generals met in Poland to consider calls to boost troops in Afghanistan. Generals urged member countries to send all the forces they promised, amid mounting casualties in the south. They were expected to call for about 2,500 extra troops.

A number of Nato soldiers, most of them British or Canadian, have been killed in recent weeks. Officials from Turkey, Germany and Italy have expressed reluctance to move their troops from reconstruction work in safer parts of Afghanistan to the troubled south.

In the latest fighting in the Panjwayi district, more than 40 Taliban are reported killed by air strikes and artillery barrages. Reporters have been unable to visit the scene to verify casualty figures.

A Nato spokesman said a bombmaking factory had been found in the area, and that alliance forces had reopened the main highway out of Kandahar city to civilian traffic.

The aim of the Medusa offensive, which began on 2 September, is to drive the insurgents from their strongholds in Kandahar. It is the biggest operation in the area since the Nato-led International Security Assistance Force (ISAF) took over southern Afghanistan from a US-led coalition at the end of July.

At the Warsaw meeting Nato chief General Ray Henault urged member states to send "all the people and the capability" that had been signed up to. "We are currently at about 85% of the requirements and want the remainder, " he was quoted as saying.

Over 20,000 US troops are in Afghanistan, around 2,000 of them under Nato command. When Isaf takes control of the east in coming weeks, many US forces are due to transfer to Nato control.

As the meeting began on Friday, a suicide bomber rammed his car into a US Humvee vehicle in the capital, Kabul, killing at least 16 people including two US soldiers. About 30 people were wounded in the blast near the US embassy. A man claiming to be a spokesman for the Taliban told an Afghan news agency that the rebel group was behind it.

There has been a series of suicide bombings across Afghanistan, but such a large explosion in the centre of Kabul was unusual.

Security in the capital was boosted yesterday as Afghans prepared to mark the fifth anniversary of the assassination of Ahmad Shah Masood, the resistance leader under the Taliban. He died in a suicide bombing in northern Afghanistan two days before the attacks on the US in September 2001.