Zabul province in southern Afghanistan has been the scene of intense fighting for over a week now with Afghan government and US forces claiming to have killed more than 100 Taliban fighters.
The day's fighting left four Taliban fighters dead and three US soldiers wounded.
"Three coalition soldiers were wounded when their element came in contact with enemy fighters approximately eight kms northeast of Shkin in Paktika province," a statement from the coalition's Bagran Air Base headquarters near Kabul said.
"During the engagement four of the enemy fighters were killed," the statement added.
It was a fierce engagement with three US fighter jets and four helicopter gunships targeting suspected Taliban hideouts.
Afghan soldiers, fighting alongside US forces, swept through the area shortly after the bombing. Hotak said at least 14 Taliban fighters were killed in the bombardment.
The fighting erupted after US-led forces and their allies stepped up their hunt for Taliban fighters in the country's south.
Aljazeera's correspondent in Kabul on Saturday quoted state-run Afghan television as saying more than 100 Taliban fighters had been killed.
US soldier killed
Taliban and al-Qaida units have
often crossed the porous border
A group of nearly 1000 suspected Taliban fighters are said to be holed up in the region.
The latest battle comes amid increasing clashes in Afghanistan's countryside between US-led troops and their allies and the resurgent Taliban.
On Friday, a US special operations soldier was killed in the fighting in Zabul. Several other Afghan soldiers were also wounded.
Driven out of power in December 2001, the Taliban are known to have been regrouping with forces from al-Qaida.
A 12,500-strong US-led international force is currently engaged in Afghanistan hunting down remnants of the Taliban and al-Qaida.
Meanwhile, a hand grenade was hurled at the Indian consulate in the eastern Afghan city of Jalalabad, officials said during the day.
Officials said the grenade was thrown from a passing truck carrying cattle.
"Fortunately it didnt hit the building but fell into the ditch in front of the building and there were no casualties or damage," the city's security commander Haji Ajab Shah said.
Seven people who were in the truck have been arrested and were being questioned.