"Perhaps the pocket in the western side of Marjah still gives freedom of movement to the Taliban, but that is the extent of their movement."

US Marines and Afghan troops in Marjah "saw sustained but less frequent insurgent activity" on Wednesday, limited mostly to small-scale attacks, Nato said in a statement.

'Returning to normal'

Mohammad Gulab Mangal, the governor of Helmand who was among those who watched the flag-raising on Wednesday, said that life was beginning to return to "normal" in Marjah.

"You can see the people are busy in their daily lives. Some shops are still closed but once they arrest the enemy, hopefully, the shops will reopen too."

In depth

  Holbrooke on 'Operation Moshtarak'
  Operation Moshtarak at a glance
  Gallery: Operation Moshtarak
  Video: Forces 'positive' on Afghan assault
  Video: Afghanistan's influential elders
  Video: Taliban second in command captured
  Focus: To win over Afghans, US must listen
  Timeline: Afghanistan in crisis

But he warned that Marjah had not yet been "cleared" completely of Taliban fighters or the mines they have planted.

He said Afghan troops were still active in the area, and he declined to give an estimate for how long it would take until Marjah was under complete government control.

"From the military point of view, one cannot set an exact timeline but work to clear mines continues," he said.

Meanwhile, a Taliban spokesman disputed that US-led forces were gaining making gains from the group's fighters, saying that Nato forces were under siege.

Al Jazeera's James Bays, reporting from Helmand, said the Taliban had put out a statement saying "this is going to be a shameful defeat for international forces".

He said that despite the claims from NAto, Afghan and US military leaders it was quite difficult to determine who was winning on the ground.

"It's very hard to get a full picture of what's going on on the wider battlefield, to see exactly who is in control of what," Bays said.

The military - I don't think - even know exactly where the Taliban are.

"They know there are areas where they haven't gone to yet because of those improvised explosive devices.

"They don't know whether they are going to face any other resistance. So yes, it is very difficult to tell."

Nato-led and Afghan forces have faced sporadic resistance as they have attempted to take Marjah and nearby Nad Ali from the control of Taliban and drugs traffickers.

Nato forces say the offensive, in which 15 Afghan civilians have died, is aimed at re-establishing Afghan government control so security and civil services such as police stations, schools and clinics can be set up.

Officials have reported the deaths of only two international forces troops during the operation so far, with one American and one Briton killed on Saturday.