KANDAHAR - Fighting raged Thursday in Helmand after Afghanistan rushed military reinforcements to beat back Taliban insurgents advancing on the besieged capital of the southern poppy-growing province, as officials downplayed fears the city could fall.

Afghan forces fought back insurgents after they stormed Nawa district, just south of Lashkar Gah city, late Wednesday, raising alarm that the provincial capital was at risk. But US and Afghan officials insist that they will not allow another urban centre to be captured, after the Taliban briefly overran northern Kunduz city last September in their biggest victory in 15 years of war.

"The security situation in Lashkar Gah is under our control," said defence ministry spokesman Dawlat Waziri. "We have retaken control of Nawa. Fighting is still going on in the outskirts but we are making progress with clearance operations," he told AFP, adding that dozens of Taliban were killed in the fight.

Fierce battles in recent days across Helmand, seen as the focal point of the insurgency, has sent thousands of people fleeing to Lashkar Gah, sparking a humanitarian crisis as officials report food and water shortages. The United States has stepped up air strikes supporting Afghan forces on the ground, highlighting the intensity of the battle in Helmand.

The turmoil convulsing the long-contested province, blighted by a huge opium harvest that helps fund the insurgency, underscores a rapidly unravelling security situation in Afghanistan.

Around 30,000 people have been displaced in Helmand in recent weeks, local officials said, with many of those fleeing to Lashkar Gah forced to abandon their lentil, maize and cotton crops during the lucrative harvest season.

"We left everything behind in Nawa - our house, our grape and maize harvests. We fled with 15 members of my family to Lashkar Gah, fearing for our lives," Mohammad Ali, 40, told AFP in a camp in the provincial capital.

"For the last three days we have been surviving on bread and water. We will die of hunger."

The residents of Lashkar Gah said the city was practically besieged, with roads from neighbouring districts heavily mined by the insurgents.

Doctors Without Borders (MSF) said it had downscaled its team in Lashkar Gah, with some non-medical staff relocated from the city.

"In Helmand, #Afghanistan, we're still running Boost hospital... as fighting nears," the international medical charity tweeted on Wednesday.

"We've shared coordinates of our 300 bed hospital to approaching warring parties in Helmand."

The Taliban effectively control or contest 10 of the 14 districts in Helmand, the deadliest province for British and US forces in Afghanistan over the past decade.

NATO officially ended its combat mission in December 2014, but US forces were granted greater powers in June to strike at the insurgents as President Barack Obama vowed a more aggressive campaign.

Washington has deployed several hundred troops in Helmand in recent months.

Northern Kunduz was the first city to fall to the insurgents last September, in a stinging blow to Afghan forces who have struggled to rein in the Taliban since the NATO combat mission ended.

The fighting in Helmand comes as Afghan troops are stretched on multiple fronts across Afghanistan - including eastern Nangarhar province where the Islamic State group is making inroads.