Nato ground troops called in air and artillery support during the clash with rebel forces of around 100 fighters in the south in one of the bloodiest weekends this year.
Most of the violence, on the anniversary on Saturday of Afghanistan's independence from Britain in 1919, was in the south where a Nato-led force took command three weeks ago in the alliance's toughest military operation yet.
In the deadliest clash scores of rebels attacked the town of Panjwayi in Kandahar province late on Saturday, sparking a five-hour series of battles involving Afghan and Nato soldiers, officials said.
The Taliban stormed the town, 35 kilometres (20 miles) west of the main southern city of Kandahar, from three directions and began fighting with local police.
Reinforcements from the Afghan army and police and Nato 's International Security Assistance Force surrounded the area and returned the attack, a police official said.