Forces of the anti-Taliban Northern Alliance claim to have taken the key Afghan city of Mazar-e-Sharif.
Meanwhile, hundreds of Northern Alliance fighters, backed by tanks, were massing yesterday opposite Taliban forces north of Kabul, preparing for an offensive on the Afghan capital.
The Taliban confirmed that opposition troops had entered Mazar-e-Sharif, but said they were regrouping their forces outside the city, according to the Afghan Islamic Press.
An al-Jazeera television correspondent reported yesterday evening from the Taliban stronghold of Kandahar that the Taliban were denying they had lost Mazar-e-Sharif.
The apparent seizure of Mazar-e-Sharif, a major crossroads which commands access to the west and south of the country, and an important religious centre only 35 miles from the Uzbek border, represents a major strategic and psychological advance for both the Northern Alliance and the US, whose campaign has struggled recently.
The breakthrough came after an offensive launched earlier in the week by Alliance forces and an intensification of US bombing had ended weeks of siege and intermittent fighting. Official US sources in Washington, however, would only confirm that they had seen significant movements, including retreating Taliban, although they did describe the developments as "encouraging".
But jubilant leaders of the Northern Alliance were adamant. "We have the entire city. The Taliban didn't put up a fight. They ran away", said Mr Mohammed Serif Nadene, a spokesman for an ethnic Tajik commander, Mr Ata Mohammed, one of three Alliance generals involved in the attack.
Seizure of the city would enable the US to establish a base inside Afghanistan. It also opens the possibility of a major humanitarian relief operation by road from neighbouring Uzbekistan to the whole of the north of the country.
Military experts say it will also seriously disrupt Taliban routes to the west and should allow allied domination of the plains to the north of Kabul.
The reported capture of Mazar-e-Sharif comes at an important time politically for the US, where critics, particularly on the right, have complained of the lack of success of the campaign and have been calling for an escalation of both the air and ground campaign.
The administration has defended its campaign, describing it as running well and according to plan, but, with winter looming, capturing Mazar-e-Sharif would enable the coalition to establish a land bridge into Afghanistan.
The American ABC television network reported that the commander of the US military operation in Afghanistan, Gen Tommy Franks, in a meeting yesterday with President Bush, was expected to request increased numbers of troops on the ground as well as more land-based jets. US planners will be pleased that the much-criticised forces of the Northern Alliance apparently took the city without ground troop assistance from the US.
US special forces did provide tactical advice to the rebels and located targets for the air raids which crucially softened up the Taliban defences, but the US would still prefer to put off actual involvement in ground combat.
President Bush will also find the Northern Alliance's reported success a timely development in what is expected to be a robust speech today to the UN General Assembly in which, according to his spokesman, Mr Ari Fleischer, the president "will put the world on notice that sympathy is not enough", that neutrality is not an option in the war on terrorism and that the US expects action now from each country according to its ability.
The reaction of the Pentagon has been cautious and it has been unwilling to announce a victory until the dust of battle clears. But its spokesmen have made clear that, if successfully consolidated, the seizure of the city is of enormous significance. Gen Franks said that the capture of the strategic crossroads could allow US troops in Uzbekistan to establish a land bridge into Afghanistan.
The US Secretary of State, Mr Colin Powell, last night advised the Northern Alliance to harass the Taliban in Kabul but warned them against entering the city.