U.S., British and Afghan soldiers are trying to push the Taliban out of a southern Afghan town.
The latest battle for Musa Qala in Helmand province began Friday.
Helicopters brought in U.S. troops, while British and Afghan troops advanced on the ground.
Musa Jan, a resident of Musa Qala district, told The Associated Press that NATO and Afghan forces dropped leaflets telling villagers: "Don't go outside your home. We want to bring peace to Musa Qala."
An Afghan defence ministry spokesman told a Saturday news conference that 12 insurgents and two children have died in the assault.
"The enemy always tries to use human shields ... and our demand from them is that they stop putting civilian lives in danger," said Gen. Mohammad Zahir Azimi.
About 200 to 300 civilians fled after being informed in advance about the operation, he said.
There are no reported casualties among coalition troops.
Musa Qala is the largest town currently held by the Taliban, so capturing it would provide a major boost to U.S. and Afghan troops as winter begins to set in.
Afghan President Hamid Karzai said Musa Qala residents had requested government forces eject the Taliban.
"A man who lost 19 members of his family in a bombardment in Helmand province came to me and said 'the people of Musa Qala are expecting you to save them'," he said in a speech.
"The man from Helmand pleaded with me to set them free from the Taliban and also other fighters from Pakistan and other countries who brutalize and oppress the people."
British troops had a presence in Musa Qala, which sits in the middle of Afghanistan's main poppy belt, but withdrew in October 2006 after a controversial agreement that gave security responsibility to Afghan elders.
In February 2007, the Taliban swept into town and have remained in control ever since.
"For some period of time, Musa Qala has become a base for terrorists. Hundreds of foreign terrorists have gathered there," Azimi said.
Taliban commander Mullah Ahmadullah told the AP that his forces were strengthening their positions in Musa Qala and militants from nearby districts are coming to help.
"The morale of the Taliban is high. We will fight against NATO and Afghan forces. We will not lay down our weapons. We will fight until the death," Ahmadullah said.
Meanwhile, U.S. forces say they killed several insurgents, including a commander, with a "precision-guided munitions strike" on Friday in the Musa Qala district.
The leader is believed to be responsible for attacks on security forces and is involved in weapons and drug trafficking, the coalition said.
NATO reported one soldier died and another was wounded in an explosion on Saturday.
The International Security Assistance Force didn't give details about the casualties' nationalities or the location of the incident.
The Associated Press estimates that more than 6,200 people have died in insurgency-related violence this year -- the worst total since the U.S.-led invasion of late 2001.
With files from The Associated Press
