Eight American soldiers and two Afghan troops have been killed in the deadliest attack on coalition troops for more than a year, officials say.
The battle happened in Nuristan province in the remote east of the country when military outposts were attacked, a Nato statement said.
The Taliban said it carried out the attack, and had captured local police.
Violence has escalated in eastern Afghanistan as insurgents have relocated from the south.
In a statement, Nato's International Security Assistance Force (Isaf) said that tribal militia launched attacks on foreign and Afghan military outposts from a mosque and a nearby village.
My heart goes out to the families of those we have lost and to their fellow soldiers who remained to finish the fight... Both the US and Afghan soldiers fought bravely together
Col Randy George
US area commander
The attack is thought to have taken place in the Kamdesh district of Nuristan, and lasted several hours.
"Coalition forces effectively repelled the attack and inflicted heavy enemy casualties while eight Isaf and two ANSF [Afghan National Security Forces] members were killed," the statement said.
The US area commander, Col Randy George, said his heart went out to the bereaved families, adding that US and Afghan soldiers had "fought bravely together".
It was the worst loss coalition troops have suffered since August 2008, when 10 French troops were killed in an ambush in Kabul province.
A Taliban spokesman, Zabihullah Mujahid, said the movement was behind the attack.
According to AP news agency, Mr Mujahid also said some 35 Afghan police officers had been taken into Taliban custody, and their fate would be decided by a council.
A local deputy police chief is reported to have said contact had been lost with 19 police officers, though the provincial governor is quoted as denying any such development.
The battle happened in Nuristan province in the remote east of the country when military outposts were attacked, a Nato statement said.
The Taliban said it carried out the attack, and had captured local police.
Violence has escalated in eastern Afghanistan as insurgents have relocated from the south.
In a statement, Nato's International Security Assistance Force (Isaf) said that tribal militia launched attacks on foreign and Afghan military outposts from a mosque and a nearby village.
My heart goes out to the families of those we have lost and to their fellow soldiers who remained to finish the fight... Both the US and Afghan soldiers fought bravely together
Col Randy George
US area commander
The attack is thought to have taken place in the Kamdesh district of Nuristan, and lasted several hours.
"Coalition forces effectively repelled the attack and inflicted heavy enemy casualties while eight Isaf and two ANSF [Afghan National Security Forces] members were killed," the statement said.
The US area commander, Col Randy George, said his heart went out to the bereaved families, adding that US and Afghan soldiers had "fought bravely together".
It was the worst loss coalition troops have suffered since August 2008, when 10 French troops were killed in an ambush in Kabul province.
A Taliban spokesman, Zabihullah Mujahid, said the movement was behind the attack.
According to AP news agency, Mr Mujahid also said some 35 Afghan police officers had been taken into Taliban custody, and their fate would be decided by a council.
A local deputy police chief is reported to have said contact had been lost with 19 police officers, though the provincial governor is quoted as denying any such development.
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