An Opposition spokesman said the old front lines on the old and new roads about 25 kilometres north of the capital Kabul had been secured as the Taliban conceded their losses.

``We have now captured all lost territories. The previous front lines have been re-established and we will soon decide our next course of action,'' said the opposition spokesman, who declined to be named. ``Taliban dead may amount to 1,000 but we have to confirm this with other field commanders,'' he added.

Independent sources said they believed the situation on front lines was tense but quiet with many of the militia's troops returning to Kabul where they were expected to regroup. ``The casualties were heavy, there is no doubt, the hospitals in Kabul have been very busy,'' one western source told AFP.

Taliban InformationMinister Mulla Amir Khan Muttaqi has admitted the militia had withdrawn its forces from Gulbahar, Jabul Seraj, Mahmoud-I-Raqi and Charikar. But he said the retreat was ``technical'' and he vowed the militia would launch anew and better-planned operation soon.

Muttaqi said the islamic militia withdrew from the areas in line with a decision made by its military council.

The Taliban reversal came a day after its leader Mulla Mohammad Omar asked the opponents to surrender and offered them a general amnesty.

On Thursday, Afghan opposition forces scythed through Taliban positions in a dramatic counter-attack, recapturing a string of towns and inflicting heavy casualties .

The strike came one week after the Taliban launched its summer offensive targeted at gaining the North-East provinces which are controlled by Masood.

Backed by heavy artillery, tanks and a fleet of aging MiGs, the Taliban forced Masood to retreat into the Panjsher Valley as the advancing militia pushed front lines back about 75kilometres.

But those gains were completely eroded after Masood stunned his rivals with an unexpected counter strike.

The ethnic Pashtoon Taliban control most of Afghanistan and is attempting to end a five-year civil war by capturing the provinces held by Masood and his ethnic Tajiks.

Masood is seen as the last potent military rival to the Taliban's ambitions to capture the whole of Afghanistan. He has thwarted similar Taliban attempts to wipe him out in the past.

The United Nations Security Council on Thursday condemned the Taliban offensive and demanded immediate resumption of political negotiations under UN auspices.