The Taliban's onslaught in Helmand began on June 19 when at least 800 fighters launched the offensive centred in Sangin district, a hotbed of opium production and intense fighting during the 13-year insurgency.
"The Taliban offensive has been beaten back, their plan to gain territory and capture districts have totally been foiled. Some 260 of the terrorists have been killed", Afghanistan's interior ministry spokesman Sediq Sediqqi said.
The Taliban's drive into Helmand province is seen as the biggest test of Afghan security forces so far in the current summer "fighting season" and comes as the government is locked in a stalemate over the presidential election.
Government forces had started a push to retake the areas they had lost in the early days of the offensive, Seddiqi said, but their progress had been "slow" as the areas that the Taliban had been pushed out of were "heavily mined".
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"Just yesterday police defused 60 landmines in Sangin district," Sediqqi said.
A Taliban spokesman, Yousuf Ahmadi, rejected the claim made by the government, saying that fighting was still ongoing in Sangin.
"Our mujahideen have attacked several security checkpoints in Sangin district," Ahmadi told AFP.
The battle in Helmand comes as NATO's combat mission winds down by the end of this year, and Afghanistan's army and police are fighting against the Taliban with decreasing support from the US-led military coalition.