KULANGAR (Reuters) - Two NATO service members and five Afghans described by the alliance as insurgents were killed in a gunbattle during a pre-dawn swoop on a house on Friday, prompting angry villagers to demonstrate in protest. The international force said the dead Afghans were all insurgents, who had opened fire on troops as they approached a house. Villagers in the area in Logar province described the men as civilians. So-called night raids on Afghan houses by foreign troops in the hours of darkness are a frequent source of friction between the Afghan government and the NATO-led force. The US and NATO commander, General Stanley McChrystal, has given instructions that night raids be carried out only as a last resort and with Afghan troops in the lead, to prevent incidents where Afghans defending their homes are mistaken for insurgents. Troops were sent to the house after intelligence indicated insurgent activity, a NATO statement said. As the combined force approached the compound they began receiving hostile fire from different points including heavy machine gun fire. A Taliban suicide attack commander was among those killed in the firefight, and ammunition and bomb-making gear were found in the house, it said, adding that no civilians were harmed. Scores of angry protesters came out onto the main highway towards Kabul on Friday morning to protest against the incident, chanting Death to America and anti-government slogans. Why do the Americans kill our people brutally everyday? We want them to stop this or we will pick up weapons and fight them, said a protester, Nawid, who goes only by one name. Deen Mohammad, a school student and neighbour of the house where the raid took place, said the five who were killed were two brothers who owned the house, and three of their guests who had nothing to do with the Taliban.