Hundreds of Afghan demonstrators on Tuesday accused US-ledNATO troops of killing four children during clashes with insurgentsin a southern Afghan town, officials and witnesses said.

The protesters, who were carrying the bodies of four children aged eight to 12, blocked the Kabul-Kandahar highway and chanted anti-US slogans, they said.

A spokesman for NATO's International Security Assistance Force(ISAF), Lt-Commander Brian Badura, said initial reports suggested that the children were killed by insurgent fire.

"We are aware of an incident in southern Afghanistan yesterday. ALP (Afghan Local Police), along with coalition advisors, were meeting with local villagers when they were attacked by insurgents," he said.

"Initial reporting indicates there were a number of children killed and wounded by the insurgents. The children were evacuated by coalition forces to a medical facility for treatment."

The deputy governor of Zabul province, Mohammad Jan Rasoulyar, said the children died during an exchange of fire between Taliban insurgents and ISAF and Afghan security forces in Shahjoy in the troubled southern province on Monday.

The gunfight began when the security forces were meeting local community leaders and came under attack by insurgents.

"ISAF and Afghan troops returned fire. There was an exchange of fire during which four children were killed and some others kids were injured. Today the people are protesting the killing of the children," Rasoulyar told AFP.

The official said his initial findings suggested the casualties were caused by Taliban fire.

Police official Mohammad Zahir told AFP from the scene that "a few hundred" people took part in the protest. The men carried the bodies of four children they alleged were killed in ISAF fire, he said.

ISAF headquarters referred queries to a regional command-base which could not immediately be reached for comment.

Civilian casualties are a sensitive issue in the US-led war against the Taliban insurgency and have often been the cause of tense relations between Kabul and Washington.