Despite suffering a brutal battlefield defeat, the Taliban retained their presence in Kandahar province, leading to the subsequent Operation Falcon Summit.

A further statement from the alliance said: Reports indicate that more than 200 Taliban fighters have been killed since Operation Medusa began early morning on September 2, 2006.

This figure was arrived at by reviewing information from ISAF surveillance and reconnaissance assets operating in Panjwaye and Zhari districts, as well as information reported by various Afghan officials and citizens living nearby,More than 80 suspected Taliban fighters were captured by Afghan police and a further 180 insurgents were seen fleeing the district, the statement said.

The NATO troops' objective was, basically, to capture a grouping of villages known as Pashmul, which had been the site of repeated battles throughout the summer of 2006 and where several Canadian soldiers were killed on August 3.

Explosions echoed across grape and pomegranate fields and clouds of dust rose amid the greenery and dried-mud houses of the Panjwayi district, which is about 12 miles (19 km) from Kandahar city.

After Operation Medusa started, authorities in Kandahar warned people not to travel off the main highway in the province, which leads into Panjwayi.

NATO said in a statement, "Two USAF aircraft provided the support but regrettably engaged friendly forces during a strafing run, using cannons."

The A-10 aircraft pilot mistook the Canadians’ burning garbage pile for a smoke device that was previously dropped to help him identify the Taliban position.

Maj. Scott Lundy said earlier that an estimated 700 militants were "trapped" in an area spanning several hundred square miles in Panjwayi and Zhari districts, some in fortified compounds, others moving in the open.

After the Ambush, members from 5 Platoon engaged the enemy, taking control of the recoilless rifle, to prevent additional coalition casualties.

Three insurgent positions, a bomb-making factory, and a weapons cache were destroyed, and ISAF troops occupied parts of Panjwayi and Zhari districts.

Late on the 10th insurgents staged a counterattack which led to the killing of another 92 militants, many falling easy prey to the Canadian snipers positioned on hills.

As the hours unfolded evidence of the Taliban's presence mounted: 50 kilograms (110 lb) of nitrogen, dozens of batteries, rocket-propelled grenades, ammunition, tunnels and bunkers.

NATO and Afghan soldiers had to check every building and scour every inch of ground before victory could be declared and residents allowed to return to their homes.

But at the day's end an Afghan interpreter with the Canadian troops reported that he heard radio chatter from the Taliban, and that they were saying about pulling together in a spot to dig in and fight.

[7] A day after NATO declared victory a suicide bomber in Panjwayi district of Kandahar province killed four Canadian soldiers while they were on a security patrol.

After that the next phases of operation Medusa began which included reconstruction of infrastructure and roadways, combined with efforts to help the local people return home and link the regional economy to the rest of the country.

On October 6, 2006 anonymous commanders from five NATO countries, were demanding their governments "get tough" with Pakistan over the alleged support and sanctuary the Pakistani Interservices Intelligence (ISI) provided to the Taliban during operation Medusa.

Afghan Defense Ministry spokesman Gen. Zahir Azimi, citing intelligence reports, said 89 suspected Taliban militants and an uncertain number of civilians had been killed during the first two days of fighting in Panjwayi district.

It was not immediately possible to gain independent confirmation of the casualty reports, as the government had ordered vehicles off the roads leading to Panjwayi during the operation.