A Canadian soldier was wounded in southern Afghanistan on Friday when a Leopard tank hit an improvised explosive device in the Arghandab district, where Afghan and coalition troops have been waging in a fierce battle with the Taliban.

The soldier, who has not been named, has been airlifted to a Kandahar military hospital with a leg injury, the Canadian military said Friday. He is said to be in fair condition.

He was able to talk to his family in Canada and is expected to return to active duty after treatment, CTV's South Asia Bureau Chief Paul Workman reported.

The Arghandab area had been the scene of heavy fighting between the Taliban and coalition and Afghan troops.

On Thursday, Canadian and Afghan troops in the main southern city of Kandahar said they had halted a Taliban offensive close to the city.

The insurgents were forced to retreat and pull out of Arghandab, Maj. Eric Landry told reporters.

However, a strong contingent of troops remains in the area.

Afghan officials said 50 Taliban fighters had been killed in the clashes and described the Taliban withdrawal as a major government victory.

Mullah Naqib, a pro-Canadian veteran of the 1980s resistance to the Soviet occupation, had been in charge of the area but died several weeks ago.

The clashes between the Afghan and coalition troops took place about 26 kilometres from the city, making it the closest the Taliban had been to Kandahar since 2001.

Thousands of local residents fled south to Kandahar when heavy fighting began on Monday. Those families are expected to start returning in coming days.

Meanwhile Mullah Mansour Dadullah, the Taliban's military commander in southern Afghanistan, promised to keep up the fight.