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The seized the strategic city of onÌýThursday, just 95 miles (150 kilometres)Ìýfrom , in one of the insurgents' most important gains in a lighting offensive that has seen them seize 10 in a week.

The interior ministry confirmed the fall of the city, which lies along the major Kabul-Kandahar highway and effectively serves as a gateway between the capital and militant strongholds in the south.

"The enemy took control," spokesman Mirwais Stanikzai said in a message to media, adding fighting and resistance was still going on.

The government has now effectively lost most of northern and western Afghanistan, and now holds a scattered archipelago of contested cities also dangerously at risk of falling to the Taliban.

The conflict has escalated dramatically since May, when US-led forces began the final stage of a troop withdrawal due to end later this month following a 20-year occupation.

The loss of the Ghazni will likely pile more pressure on the country's already overstretched air force, needed to bolster Afghanistan's dispersed security forces who have increasingly been cut off from reinforcements by road.

In less than a week, the insurgents have seized 10 provincial capitals and have encircled the biggest city in the north, the traditional anti-Taliban bastion of Mazar-i-Sharif.

Fighting was also raging in Kandahar and Lashkar Gar -Ìýpro-Taliban heartlands in the south -Ìýas well as Herat in the west.

Late Wednesday, the Taliban said they had overrun the heavily fortified jail in Kandahar, saying "hundreds of prisoners were released and taken to safety".

The Taliban frequently target prisons to release incarcerated fighters and replenish their ranks.

The loss of the prison is a further ominous sign for the country's second city, which has been besieged for weeks by the Taliban.

Kandahar was once the stronghold of the Taliban -Ìýwhose forces coalesced in the eponymously named province in the early 1990s -Ìýand its capture would serve as both a tactical and psychological victory for the militants.

'Deteriorating security situation'

Hundreds of thousands have been displaced by the fighting that has enveloped the country.

In recent days, Kabul has been swamped by the displaced, who have begun camping out in parks and other public spaces, sparking a fresh humanitarian crisis in the already overtaxed capital.

In , defence officials appeared to be grappling with the spiralling situation but insisted that Afghan security forces were still holding their ground.

"What we're seeing, [is] a deteriorating security situation, we've been nothing but candid about that," Pentagon spokesman John Kirby told reporters Wednesday.

"But there are places and there are times, including today, where Afghan forces in the field are putting up a fight."