Nato's International Security Assistance Force (Isaf) confirmed its troops called in air support after being attacked in Helmand province, and said it was investigating reports of a "small number" of civilian casualties.

Provincial police chief Colonel Mohammad Hassan told AFP the bombing came after Taliban fighters attacked an Isaf convoy from among houses and gardens in a village.

About 20 Taliban were also reported killed in the strike after midnight, he said.

"The Nato forces' air strike on the area mistakenly targeted two to three civilian houses, killing 25 civilians," Hassan said.

The dead included nine women and three children aged from six months to two years old, he said.

The rest were men, including the mullah of the mosque of the village about 14km north of Lashkar Gah town.

Hassan said the bodies of the dead were lying where they had been hit.

The information that 20 Taliban were killed had come from "reports we get from the area and from the locals," he said. "The militants seem to have taken the Taliban bodies with them."

Isaf said the target of the strike was a compound "assessed to have been occupied by up to 30 insurgent fighters, most of whom were killed in the engagement."

"Isaf troops are now investigating reports that a small number of civilians may also have been in the compound," it said in a statement.

It had not yet been possible to determine if civilians had been killed or injured or if any casualties were the result of insurgent or Isaf action, it said.

One Isaf soldier was wounded in the engagement, said spokesman Major John Thomas.

The insurgent Taliban confirmed fighters from the group had ambushed troops in the area. "Taliban left the area before the air strike," spokesman Yousuf Ahmadi said.

But Isaf's British military deployment, based in Helmand, said soldiers had "positively identified, from the ground and the air, Taliban in the compound and more running into it."

Civilian casualties from military action in Afghanistan is a sensitive issue after several incidents that have killed scores of people, although insurgents kill by far the most civilians.

On Sunday last week seven children were killed in an air strike targeted on a suspected al-Qaeda compound and carried out by the US-led coalition, which operates alongside Isaf and the Afghan security forces.

The Agency Coordinating Body For Afghan Relief of nearly 100 foreign and Afghan non-governmental organisations said Tuesday that its figures showed Afghan and foreign troops had killed nearly 250 civilians this year.

Human Rights Watch says around 1,000 civilians were killed in insurgency-linked violence in Afghanistan last year, about 230 of them in military action.

In other violence reported Friday, Taliban militants killed seven Afghan policemen and wounded a soldier from the coalition in separate ambushes around the country, Afghan officials said.

But despite a series of high-profile insurgent attacks in recent weeks, Afghanistan's second Vice President Karim Khalili said during a visit to Tokyo that the Taliban were on the wane.

"The Taliban's activity is weakening if you compare the number of terrorist attacks attempted by them this year and last year," he said.

"We have also inflicted great damage to the Taliban in a joint military campaign with Nato through the death of a famous Taliban leader," he said.

Mullah Dadullah, considered the Taliban's top military strategist, was killed in May.

Earlier Taliban militants killed seven Afghan policemen and wounded a soldier from the US-led coalition in separate ambushes around the country, Afghan officials said yesterday.

Rebels attacked a joint patrol by Afghan police and coalition forces overnight in the eastern province of Nangarhar, said Noor Agha, a spokesman for the provincial governor.

"One border policeman was killed while a coalition solider and one Afghan policeman were wounded in the attack in Pachir Wa Agam district," Agha said.