Nato and Afghan forces, backed by helicopter gunships, began a huge offensive yesterday against hundreds of Taleban militants who broke out of jail in the southern city of Kandahar last week.

More than 1,000 Canadian and Afghan troops moved into the southern district of Arghandab, near Kandahar, where the escaped convicts took control of at least eight villages on Monday.

As villagers fled the lush valley – known for its pomegranates and hashish – at least 35 militants and two Afghan soldiers were killed on the first day of what is expected to be a three-day operation, according to Afghan and Nato officials.

The operation is designed to reestablish President Karzai’s limited authority in southern Afghanistan, the centre of the Taleban insurgency and the opium trade.

But the Taleban has vowed to resist in its latest show of defiance against Mr Karzai and the 60,000 foreign troops and roughly 150,000 Afghan soldiers that back him.

A Taleban spokesman said that the militants had captured Arghandab in order to launch a bigger attack on Kandahar city – the birthplace of the hardline Islamic movement whose government was toppled by a US-led invasion in 2001.

General Carlos Branco, a spokesman for the Nato-led International Security Assistance Force, said that the Afghan and Canadian forces were progressing “steadily and carefully” to avoid civilian casualties and improvised explosive devices.

He also confirmed that military helicopters had engaged the militants.

The Afghan Defence Ministry said that a Nato airstrike was aimed at a group of Taleban in Tabeen village in Arghandab, killing 20 “local and foreign terrorists”. Three more were shot dead elsewhere in the district, while 12 militants were killed in neighbouring Maiwand district. Two soldiers were also killed in the operation, it said.

Ahmad Wali Karzai, the head of the Kandahar provincial council and a half-brother to the President, said that the operation had forced about 1,500 families to leave their homes and abandon crops.

Mohammad Faiz, who managed to evacuate his family on Tuesday, said he was hoping to retrieve his belongings from Arghandab valley, which is now echoing to the sound of artillery and smallarms fire.

“I have come to see if I can take away our house items,” he told reporters at the head of the valley as Nato helicopter gunships opened fire in the distance.

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