As the U.S.-led war against terrorism ran into the Muslim holy month of Ramadan, fighters from the Taliban movement that backs bin Laden were besieged in their southern stronghold of Kandahar by rival Afghan forces.

Just over two months after the Sept. 11 attacks on the United States that killed more than 4,500 people and galvanized Washington into hunting down the alleged mastermind, bin Laden, his whereabouts were still unknown, but the military campaign against him was gaining momentum.

U.S. officials said they were shutting down his freedom to move, and the apparent killing of Mohammed Atef, one of the top leaders of his al Qaeda network, was a significant blow.

"We believe that it is true that he (Atef) was killed in the U.S. bombing around Kabul," said a U.S. official, who asked not to be identified.

The strike that may have killed Atef, an Egyptian former policeman, was separate from one on Tuesday in which the Pentagon said several senior officials of the Taliban and perhaps al Qaeda had died in the targeted bombing of a house in Kabul.

One U.S. official said he believed the fatal attack had been on Thursday night, but there was no formal confirmation of that.

Terrorism expert Peter Bergen said Atef was the network's military commander. "It's like taking out Tommy Franks (U.S. general overseeing military operations in Afghanistan)," Bergen told Reuters.

Defense Secretary Donald Rumsfeld said U.S. special forces had shot Taliban and al Qaeda fighters in southern Afghanistan.

"They are killing Taliban that won't surrender and al Qaeda that are trying to move from one place to another," Rumsfeld told reporters, without elaborating whether the contacts were firefights, sniping or of some other nature.

The fundamentalist Taliban have been reeling after the opposition Northern Alliance drove them from the capital, Kabul, earlier in the week. The need to fill a power vacuum in Kabul and fashion a broad-based government from among Afghanistan's quarrelsome factions has taken on a new urgency.

CAMPAIGN ROLLS INTO RAMADAN

The military campaign rolled on despite the dawn of the Muslim holy month of Ramadan, a delicate issue as some leaders, including a vital U.S. ally, Pakistan's military ruler Gen. Pervez Musharraf, had appealed for a bombing halt during the holy month.

President Bush, eager to avoid offending Muslims, saluted Islam and played up U.S. humanitarian efforts in Afghanistan.

"As the new moon signals the holy month of Ramadan, I extend warm greetings to Muslims throughout the United States and around the world," Bush said in a statement, without mentioning the war.

In newly liberated Kabul, residents crowded into mosques, and preachers used Friday prayers to urge worshipers to hunt down bin Laden's fighters.

"It is our responsibility to chase all the Arabs and Pakistanis who may have hidden in people's villages," said one preacher at prayers marking the start of Ramadan.

"So please fulfill your obligation and help your countrymen to arrest these strangers."

The al Qaeda network -- accused by the West of orchestrating a series of terrorist actions across the globe -- is made up mainly of Pakistanis, Arabs and Chechens who are hated by many Afghans despite the sanctuary offered to them by the Taliban.

Taliban top leader Mullah Omar remained free, and in a rare interview on Thursday vowed to destroy the United States.

"The situation in Afghanistan is part of a big plan including the destruction of the United States," he said through a spokesman to the BBC in a radio interview.

As for bin Laden himself, the Taliban spokesman said he would fight to the death rather than surrender.

Iran radio reported that bin Laden had probably fled from Afghanistan across the border into Pakistan. A Pakistani spokesman called the report "preposterous and mischievous."

Asked if U.S. forces and their allies were closer to capturing bin Laden and Omar, Rumsfeld said, "Until you catch the chicken, you don't have the chicken."

But with several hundred elite U.S. soldiers on the ground, "the total effect of it is that it is becoming less and less hospitable for al Qaeda and Taliban to be around," he said.

Rumsfeld also said a number of senior Taliban and al Qaeda figures were being held by the opposition in Afghanistan and would be interrogated by American forces.

He declined to identify the detainees further, saying, "We do have some names and they were not privates, some of them."

"They bob and weave and move and that's what they're doing. They are moving a great deal and we are clearly reducing the square miles of geography that they to function in," he said.

Pakistan, which has faced pressure from Muslim radicals at home over its support for the U.S.-led war, has put tanks on its border to stop fleeing fighters crossing.

TALIBAN FIGHTERS DEFIANT

Fighters of the Taliban -- which imposed a severe version of Islamic rule during their years in power -- stood defiant in Kandahar on Friday and mounted a fierce defense of a besieged northern city. How long they could hold out was unclear.

Armed followers of tribal leader Hamid Karzai and former Kandahar governor Gul Agha had established positions in southern Afghanistan to take on the Taliban, witnesses said.

The opposition said it had taken the airport and reported chaos in the streets, but the Taliban has said it was still in control.

U.S. jets pounded the city's eastern districts with a blistering bombardment through the night and into the early morning, hitting the Taliban's Foreign Ministry building and a mosque, the Pakistan-based Afghan Islamic Press (AIP) said. It said 11 civilians were killed.

Kandahar was also under threat from the west where opposition warlord Ismail Khan vowed to march on the city.

In Kunduz, last redoubt of the Taliban in the north, thousands of fighters were under siege, the opposition said.

They had been offered a chance to surrender, commanders near the front line said. The United States estimated there were about 2,000 to 3,000 "hard-core" Taliban fighters -- many of them foreign -- in Kunduz, where U.S. jets were heard in the skies.

The Afghan opposition, despite lightning territorial gains, remained divided.

The mainly ethnic Tajik and Uzbek Northern Alliance troops, who marched into Kabul on Tuesday, are viewed with suspicion by the dominant Pashtun tribe, from whom the Taliban draw their support and who traditionally rule the war-weary country.

Competing anti-Taliban factions around Afghanistan have been carving out their own fiefdoms.

Rivals of the Northern Alliance fear they plan to cling to power rather than allow other factions a share in government. The Northern Alliance says it wants a broad-based government.

Factions in the Northern Alliance have already split the capital along ethnic lines -- a sign that Kabul could be reverting to the patchwork divisions that sparked civil war after the expulsion of Soviet forces in 1989.

Seeking to fill the power vacuum, Francesc Vendrell, the Pakistan-based U.N. envoy to Afghanistan, was expected to fly to Kabul on Saturday to meet leaders of the Northern Alliance and invite them to a U.N. conference on the country's future.

U.S. envoy for Afghanistan James Dobbins was in Pakistan meeting officials in Islamabad and Afghan representatives.

MORE FOREIGN TROOPS MOBILIZE

At Bagram, north of Kabul, C-130 military cargo planes carrying 160 U.S. and British troops flew into the air base on Thursday to secure and repair an airfield that could be used both for military operations and for humanitarian aid.

Hints of unease surfaced in the Northern Alliance's relationship with the U.S.-led coalition. It said it had not been told of the arrival of the British troops.

France, Germany and Canada also prepared to send in forces as part of a multinational mission to protect the distribution of food to millions of needy Afghans.

France sent the first of 300 troops on Friday, headed for Uzbekistan as a staging post into northern Afghanistan. German Chancellor Gerhard Schroeder won a parliamentary vote of confidence to ensure he got majority backing for his plans to send up to 3,900 troops. Canada said the first contingent of a 1,000-strong rapid deployment force to assist in the aid effort would be ready to leave within hours of getting orders.