Taliban Capture District in Afghanistan's Helmand Province

News of the fighting came a day after the government said elusive Taliban leader Mullah Omar had died in Pakistan more than two years ago.

Officials in Helmand said the Taliban has Now Zad district on Wednesday after two days of fighting.

 "Right now our security forces are still on the outskirts of the district and fighting with the Taliban," said provincial police chief spokesman Obaidullah Obaid.

Obaid declined to comment on casualties but residents of the area, speaking to Reuters by telephone, said the bodies of members of the government security forces and Taliban were lying in the streets after the battle.

The Taliban confirmed the capture of the district centre, saying weapons and ammunition had been seized.

Helmand has been a Taliban stronghold and centre of opium production for years.

British and U.S. troops began a concerted effort to secure the province in 2006 and some of the heaviest fighting of the war took place over subsequent years in small towns like Now Zad, most of them in the fertile Helmand river valley.

More than a dozen U.S. Marines and British troops were killed in fighting over Now Zad. Most foreign troops left Afghanistan last year.

The Taliban have also made gains in the northern provinces of Sar-e-Pol and Badakhshan in recent days.