Afghan officials said Daesh captured six villages controlled by Taliban in Khogyani and Shirzad districts of Afghanistan, and that fighting has not stopped.
Afghan Taliban fighters are battling the Daesh terrorist group over control of territory in eastern Afghanistan in some of the heaviest clashes over the past year between the rival militants, officials said on Wednesday.
The fighting erupted on Monday in two districts of the eastern Afghan border province of Nangarhar, when Daesh attacked villages under Taliban control.
"Islamic State [Daesh] fighters have captured six villages in Khogyani and Shirzad districts, but the fighting has not stopped," said Sohrab Qaderi, a member Nangarhar's provincial council.
About 500 families had fled from the fighting, he said.
Casualty figures were not available.
A spokesman for the Taliban, who control more territory than at any point since they were ousted from power nearly 18 years ago, was not available for comment.
Daesh first appeared in eastern Afghanistan in around 2014 and have battled the Taliban as well as government and foreign forces.
The Afghan affiliate of Daesh, sometimes known as Daesh Khorasan, after an old name for the region that includes Afghanistan, has made some inroads into other areas, in the north in particular.
It has also established a reputation for unusual cruelty, even by the standards of the Afghan conflict, and has been behind some of the deadliest attacks in urban centres.
While Nangarhar, on the border with Pakistan, has been a Daesh stronghold, some villages in Khogyani and Shirzad districts have been controlled by the Taliban.
Fleeing villagers said they had to run for their lives.
"I could only rescue my family. We had to leave everything," said Shawkat, 36, a resident of Markikhel village in Shirzad district who sought safety in a neighbouring village.
Attaullah Khogyani, a spokesman for the provincial governor said, authorities would help the displaced villagers with food and medicine.
In August, more than 150 Daesh terrorists surrendered to the Afghan security forces after they were defeated by the Taliban in the northwestern province of Jawzjan.
The US military estimates there are about 2,000 Daesh terrorists in Afghanistan.
Many are former Taliban. There is scant evidence of direct links with Daesh in the Middle East, where the group has lost territory it once held in Syria and Iraq to Western-backed forces.