The fight for the embattled eastern Afghan city of Ghazni entered its third day as Taliban militants and security forces engaged in heavy clashes on Sunday even after Kabul vowed the city was firmly under government control.

An AFP reporter on the ground said Taliban fighters continued to roam the city, torching government offices and in control of several police checkpoints, with reinforcements deployed from Kabul slowly entering the city to confront the insurgents.

Residents cowered in their homes or attempted to flee the fighting, as skyrocketing inflation hit basic provisions, according to residents and officials.

“The situation is chaotic,” Amanullah Kamrani, deputy head of the Ghazni provincial council, told AFP from Kabul.

“In Ghazni, only the police headquarters, governor's office and a few departments are under Afghan forces' control, the rest are under the Taliban fighters' control,” he added.

Ghazni resident Rahmatullah Andar described similar scenes in an interview with broadcaster Tolonews, saying fighting continued to rage in large swathes of the city and outlying districts.

“There are not sufficient forces to repel the Taliban fighters. We have not witnessed such a large scale attack by the Taliban before,” said Andar.

Mobile services in the city remained down after militants damaged a telecommunication tower and targeted several media offices in Ghazni, making information difficult to verify.

The descriptions stood in stark contrast to statements given by Afghan and United States' officials on Saturday, who said government forces were firmly in control of the city and vowed that Ghazni was in no danger of being seized by the Taliban.

Ghazni — around two hours by road from the capital Kabul — has been under increasing danger from massing Taliban fighters for months, with reports suggesting insurgents had infiltrated the city at will.

The onslaught was the latest attempt by the Taliban to overrun an urban centre and comes as pressure increases on the insurgents to begin peace talks with the government to end the nearly 17-year-old war.

The attack was the largest tactical operation launched by the Taliban since an unprecedented truce in June brought fighting between security forces and the Taliban to a temporary pause, providing war-weary Afghans some welcome relief from the fighting.