The International Security Assistance Force (Isaf) was undertaking battle damage assessments of the operation launched in southern Kandahar province on Saturday, an official said.

However "over 200 Taliban were killed in the last two days," the source said on condition of anonymity.

"Activities are still continuing. We are trying to get a reasonable estimate of battle damage."

Three Canadian troops were killed Sunday in a major operation under way in southern Afghanistan, the defence ministry said.

British forces were meanwhile preparing to repatriate the remains of 14 soldiers killed when their plane crashed Saturday, the first day of Operation Medusa, which involves about 2,000 Afghan and Nato military personnel.

"We had air strikes yesterday. Today we launched our ground offensive and we met the enemy. Three Canadians were killed and six others were wounded," defence ministry spokesman General Mohammad Zahir Azimi said.

The new deaths would take to 18 the number of Canadian soldiers killed in enemy action this year; 30 have been killed since Canadian forces deployed to Afghanistan in 2002, months after the ousting of the Taliban government.

The Canadian military would only say that soldiers with Nato's International Security Assistance Force (Isaf) were "killed and wounded" in fighting around Panjwayi district, the focus of the operation.

"It was part of Operation Medusa which is ongoing," Lieutenant Commander Kris Phillips told AFP.

Major Luke Knittig at the ISAF headquarters in Kabul said the force had taken multiple casualties.

Hours after Medusa was launched Saturday, a British reconnaissance plane despatched from Qatar and carrying out surveillance of the operation area crashed in the Panjwayi area, killing all 14 soldiers on board.

Isaf has dismissed a claim by the Taliban that they had shot down the Nimrod MR2 spy plane, saying the crash was caused by a technical problem. "It was flying far too high when the crew reported a problem," it said.

The crew had been trying to ensure civilian casualties were avoided in Medusa, an Isaf spokesman in Kandahar city told AFP.

The remains of the British soldiers were due to be transported from the crash site to the Kandahar Air Field Sunday before being repatriated to Britain, Major Quentin Innis told AFP.

The crash caused the biggest single loss of British troops in Afghanistan or Iraq since the US-led "war on terror" was launched in November 2001.

The US Air Force sent helicopters and unmanned spy planes to the search and recovery operation, it said in a summary of daily activities.

US, British and French aircraft also bombed and destroyed Taliban targets in the area of Kandahar on Saturday, it said, while Isaf air power was also called into operations in Helmand and Khost provinces.

Medusa is the biggest offensive in the south since Isaf took command of the south from a US-led coalition on July 31.

It is aimed at driving out insurgents in Panjwayi, about 35km west of Kandahar, Afghanistan's second-largest city.

The Taliban emerged from the area as an armed force in the early 1990s, first capturing Kandahar and then sweeping to power in 1996 before being ousted five years later for sheltering al-Qaeda after the September 11 attacks.