A political and economic intervention by the international community could drive the conflict to a stalemate in favour of the Kabul government, giving it space to create a new strategy.
Since May, Taliban has launched major attacks targeting government forces across the rugged countryside.
"About 5,000 families have been displaced by the fighting," Ghulam Sakhi Rasouli, a senior Afghan official says.
Taliban insurgents capture Shir Khan Bandar, some 50 kilometres from northern Kunduz city, with government forces abandoning their posts and many fleeing, officials say.
Dozens of districts have fallen to the Taliban since early May when the US military began its final troop withdrawal.
Taliban takes up positions on highways that connect strategic Kunduz city to neighbouring provinces, officials say, as fighting escalates between insurgents and government troops.
Frustration and fear grow over the recent spike in violence and both the Afghan government and Taliban are blaming each other.
Afghan villagers say 24 civilians were killed in air strikes on Saturday in northern Kunduz province, contradicting government claims of killing 30 Taliban fighters.
Officials say casualties occurred after militants struck military checkpoints in at least three northern provinces.
The Taliban claimed they were behind a fatal roadside bombing in northern Kunduz province, that had killed the US soldier. A Taliban spokesman even tweeted a purported photo ID of the slain US soldier, without saying how it was obtained.
"At around 5 pm this evening a mine planted by the Taliban terrorists hit a civilian car ... killing 15 civilians and wounding two more," says Nasrat Rahimi, an Interior Ministry spokesman.
Heavy fighting has been going on in Kunduz city after the Taliban fighters mounted attacks from several directions on Friday night.
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