Afghan and NATO troops are said to have reached the centre of the Taliban stronghold of Musa Qala in southern Afghanistan.
They have fortified their positions in the town amid fears that militants will try to return. It is thought the Taliban forces have headed towards mountains in the north.
The settlement in Helmand province was the only sizeable centre in Taliban hands and has been described as symbolic for both sides in the conflict.
Thousands of Afghan, British and US members of the International Security Assistance Force surrounded Musa Qala in an operation that began on Friday.
A broader operation is under way in Helmand to retake the districts of Nawzad, Baghran and Washir which are still in Taliban hands.
The Taliban stormed Musa Qala 10 months ago, breaking a controversial deal in which British forces pulled out on the request of elders who said they would handle security after months of intense fighting.
The town then became a base for the fighters, whose insurgency is at its bloodiest this year with around 6,000 people dead.
