LASHKAR GAH: Soldiers from the US-led NATO coalition have joined combat to stop a Taliban advance in Afghanistan's Helmand province, where battlefield success has given the insurgents' their biggest symbolic victory in years and made talking peace a fading hope.

Nearly 14 years on from the US invasion that toppled the Islamist regime after the Septembe 2001 attacks, the Taliban are undefeated and making gains since most foreign forces left last year, but are still far from their goal of retaking Kabul.

A furious counter-assault led by the Afghan army is on in the Helmand district of Musa Qala that on Wednesday fell to the Taliban for the first time since 2007.

“The deputy defence minister is in Helmand right now and an operation is ongoing in full force to retake the district,” said Gen. Dawlat Waziri, a defence ministry spokesman.

NATO's Resolute Support coalition said U.S. aircraft dropped bombs on Musa Qala nine times in the past 24 hours, and that foreign soldiers were also helping on the ground.

“Resolute Support service members are training, advising, and assisting elements of the Afghan National Defence and Security Forces (ANDSF) operating in Musa Qala,” said spokesman Col. Brian Tribus.

Incipient peace talks collapsed last month after it was announced that Taliban leader Mullah Omar had died two years before.

The announcement was followed by a series of fatal attacks in Kabul. Looking to consolidate his position, acting successor Mullah Mansoor disavowed talks, while commanders in the field have responded with surging offensives across the country.

Hopes for reviving a planned second round of talks have faded in recent weeks, with Afghanistan government sources saying they are unwilling to let Pakistan act as a broker and with the Taliban on the offensive.

“If your enemy feels stronger day by day, it is hard to sit them down for peace negotiations,” said Graeme Smith, a veteran Afghan analyst at International Crisis Group.

“If the government wants to get them to the negotiating table, it needs to stop them taking towns.”

The fall of Musa Qala comes shortly after the Taliban grabbed the neighbouring district of Nawzad. Combined with a third district to the north, the Taliban now sit on a big chunk of Helmand, controlling lucrative opium production and major routes into Iran and Pakistan used to smuggle heroin to Europe.

Such gains in the province where British forces lost more than 400 men trying to defeat the Taliban, and where some 350 US Marines also died, are powerful propaganda for the insurgent group that is also fending off competition from the self-styled Islamic State (IS).

Seeking to shore up acting leader Mansoor's support with commanders to fend off a splinter group led by Omar's son challenging his position, the Taliban's media wing has released a series of slick videos of fighters pledging allegiance to Mansoor after military victories including the fall of Nawzad.

Another film this week showed a gathering of fighters in the north sitting atop US-supplied Humvees captured from Afghan forces.

The insurgents also released a victory song on the website Soundcloud called “Long live Musa Qala” to commemorate the recapture of the town of 20,000 people they held for seven months until British and Afghan forces wrenched it back in 2007.

The defence ministry said the fighting had killed or wounded 150 Taliban, with six soldiers killed and four wounded.

In a statement, the Taliban claimed that up to 40 soldiers were killed when they overran police and army posts around Musa Qala town.