NATO's International Security Assistance Force (ISAF) confirmed its troops called in air support after being attacked in Helmand province, and said it was investigating reports of a "small number" of civilian casualties.

Provincial police chief Colonel Mohammad Hassan told AFP that the bombing came after Taliban fighters attacked an ISAF convoy from among houses and gardens in a village.

About 20 Taliban were also reported killed in the strike shortly after midnight, he said.

"The NATO forces' air strike on the area mistakenly targeted two to three civilian houses, killing 25 civilians," Hassan said.

The dead included nine women and three children aged from six months to two years old, he said.

The rest were men, including the mullah of the mosque of the village which is in the Gereshk district about 30 kilometres (20 miles) north of the town of Lashkar Gah.

Hassan said the bodies of the dead were lying where they had been hit.

The information that 20 Taliban were killed had come from "reports we get from the area and from the locals," he said. "The militants seem to have taken the Taliban bodies with them."

ISAF said the target of the strike was a "compound (that) was assessed to have been occupied by up to 30 insurgent fighters, most of whom were killed in the engagement."

"ISAF troops are now investigating reports that a small number of civilians may also have been in the compound," it said in a statement.

"At this time it has not been possible to determine if civilians have been killed or injured, or indeed if civilian casualties were a result of insurgent or ISAF action."

One ISAF soldier was wounded in the engagement, said spokesman for the force Major John Thomas.

A spokesman for the insurgent Taliban, Yousuf Ahmadi, confirmed fighters from the group had ambushed troops in the area. "Taliban left the area before the air strike," he said.

Civilian casualties from military action in Afghanistan is a sensitive issue after several incidents that have killed scores of people, although insurgents kill by far the most civilians.

The Agency Coordinating Body For Afghan Relief of nearly 100 foreign and Afghan NGOs said this week that its figures showed Afghan and foreign troops had killed nearly 250 civilians this year.

Human Rights Watch says around 1,000 civilians were killed in insurgency-linked violence in Afghanistan last year, about 230 of them in military action.