Afghan and NATO forces fortified their positions in the southern town of Musa Qala Tuesday - a day after driving out Taliban militants based there for 10 months.
Military officials say Afghan and NATO soldiers have set up security checkpoints in and around the town as they search for remaining Taliban fighters who might still be hiding in the town in Helmand province.
A spokesman for the Afghan Defense Ministry says dozens of insurgents were killed in two days of fighting and that the town is again in government hands.
The Taliban confirmed its retreat from Musa Qala, but said it was a strategic maneuver to avoid casualties to their fighters and civilians.
More than six thousand Afghan and NATO soldiers are part of the operation to restore civilian rule in the town.
Three other districts in Helmand, the center of Afghanistan's booming opium trade, remain under Taliban control.
Taliban militants overran Musa Qala in February after British troops made a controversial decision to withdraw and hand over security to local elders.
Also Tuesday, a suicide bomber targeting a NATO convoy near Kandahar city killed two Afghan civilians, but the NATO convoy was not damaged.
In the same area, Taliban fighters ambushed a convoy supplying NATO troops. Five policemen and eight militants were killed in the battle.