A raid by NATO soldiers and a subsequent airstrike in southern Afghanistan killed 15 insurgents on Monday, NATO said, although a local official initially reported a higher death toll.
NATO confirmed there had been an operation involving coalition and Afghan security forces to detain a senior Taliban leader followed by an airstrike in Helmand province.
"Upon arrival at the suspected location the joint security force immediately took fire from several insurgents in a series of engagements. The joint security force returned fire, killing four insurgents," the statement said.
Nearby compounds were searched and a bomb-making factory and weapons cache discovered, NATO said. The soldiers decided to destroy them, but 11 gunmen on motorbikes and in three vehicles approached the site at high speed. The soldiers determined they were a threat and killed them, the statement said, before calling in an air strike to destroy the compounds.
Earlier, the head of Helmand's provincial council, Fazal Bari, said local officials had told him that around 25 people had been killed. He said four Taliban commanders were among those killed in the raid in Baghran district, Helmand's northernmost district about 100 miles (160 kilometers) north of the provincial capital of Lashkar Gah.
"People are very angry," said eyewitness Salah Ayap, a 26-year-old driver in Maigan village where the incident took place. He said foreign troops arrived in the village around 2 a.m. and there was a fierce gunfight before the airstrike.
Only two walls and one small room of a building he described as a mosque were now standing, said Ayap, and villagers were digging the dead out from under the rubble with farming tools and washing them for burial.
He said nearby houses had also been damaged, and some civilians were wounded and a 10-year-old child killed.
NATO said that they had no report of a mosque damaged or any civilians injured or killed.
Last year, NATO tightened the rules of engagement, including the use of airstrikes, if civilians were at risk. Deaths attributed to allied troops have since dropped by nearly 30 percent .
In the capital Kabul, Afghan President Hamid Karzai told reporters that once or twice a year Iran gives his office $700,000 to $975,000 for official presidential expenses. He said the U.S. has known about the Iranian assistance for years and that Washington also gives the palace "bags of money."
There was no immediate comment from U.S. officials.
Karzai's remarks came in response to report in The New York Times a day earlier that Iran was giving cash to the Afghan president's chief of staff, Umar Daudzai, to buy his loyalty and promote Iranian interests in neighboring Afghanistan.
The newspaper quoted unnamed sources saying the money had been used to pay Afghan lawmakers, tribal elders -- even Taliban commanders.
Karzai says several nations give his office money because it lacks revenue.
In an unrelated incident, an insurgent attack in eastern Afghanistan killed a NATO service member, the coalition said in a statement on Monday, bringing to 50 the number of coalition soldiers killed this month. The statement did not provide further details on Sunday's death.
In the eastern province of Khost, a suicide bomber blew up his vehicle at a checkpoint, killing two civilians and a police officer, said provincial police chief Abdul Hakin Esaqzoy. He said five police and five civilians were also wounded.
The Afghan insurgency has traditionally been fiercest in the country's south and east, along the border with Pakistan. Most of the insurgency's top commanders are believed to be hiding in the mountainous Pakistan border area. NATO and Afghan troops have been trying to wrest back control of the southern provinces from the Taliban since July, but attacks and roadside bombs continue to occur daily.
NATO has also been trying to kill or capture Taliban leaders in airstrikes and in joint ground operations with the Afghan army.
Residents say the push has resulted in patches of security in the south, but the insurgency has stepped up attacks in other parts of the country, including the north, which has traditionally been more stable.
In northern Afghanistan Monday, a suicide attacker blew up his explosives-laden car in Pul-e-Khumri, the capital of Baghlan province, said Mahmood Akmal, a spokesman for the provincial governor.
The attacker died, but no one else was injured in the blast, which appeared to be targeting a coalition convoy, he said.
Associated Press writers Rahim Faiez in Kabul and Mirwais Khan in Kandahar, Afghanistan, contributed to this report.