It is also in the middle of the country's poppy-growing belt.
Nato said the operation would continue for the next few days.
Meanwhile, in the Panjwaii district of the southern Kandahar province, Nato's International Security Assistance Force (Isaf) gave tribal elders an ultimatum on Friday.
"Afghans want peace and security, the Afghan people are neither terrorists or support terrorism"
Haji Fazel Mohammad, a Panjwaii elder
In a meeting in which local police were present, Canadian Isaf forces told tribal leaders that if they wanted assistance with security and reconstruction, they must reject the Taliban.
Major Patrick Robichaud, a spokesman for Isaf's Canadian forces, said: "We're now coming up to this crossroad, where they need to let go of one side and accept the protection of the government and the Isaf forces".
Robichaud said development agencies wanted to begin projects in the area but could turn elsewhere if security issues were not resolved.
However, Afghan leaders told Al Jazeera they felt trapped by the choices, fearing the Taliban would retaliate if they accept the Canadian offer.
Haji Fazel Mohammad, a Panjwaii elder, said: "Afghans want peace and security, the Afghan people are neither terrorists or support terrorism.
"Instead of giving an ultimatum to the elders of Panjwaii, they should give this ultimatum to Pakistan."
Nazanine Moshiri, Al Jazeera's correspondent in Afghanistan, said both the meeting and the ulitmatum were important because "it shows some Isaf forces are now bypassing the Afghan government and speaking directly to the people".
She said: "Afghanistan is a country of made up of tribes and tribal elders. The Canadians now want some of these leaders to take a stand."
The Afghan government declined to comment on the meeting but General Helaleddin Helal, a former deputy interior minister, described it as a blow to the government's credibility.
He said: "The problem in Pajwaii is there is no proper government, so the people won't support the government.
"That's why the Canadian [forces] have had to do this as a last resort, asking the people to be with us or the Taliban."
Elsewhere in Kandahar province, three suspected Taliban fighters were killed when a roadside bomb they were planting exploded prematurely on Friday, Abdul Nazik Khan, a local official, said.
The blast, which killed the three fighters, happened south of Kandahar city on a road frequently used by Nato and police forces, he said.
In the western province of Herat, police said suspected Taliban fighters ambushed and killed seven policemen, including a police commander.
Separately, suspected Taliban ambushed a police vehicle in the southcentral province of Ghazni province, sparking a firefight that left two policemen and five fighters dead, provincial police said.