NATO and Afghan soldiers killed more than 40 suspected Taliban militants in fierce raids that destroyed insurgent hide-outs and a weapons-making factory, the alliance said Saturday. One NATO soldier also died.

The insurgents were killed late Friday and early Saturday in Kandahar province's Panjwayi district, where an anti-Taliban operation was launched Sept. 2. The latest deaths brought the number of suspected militants killed by NATO in Operation Medusa to at least 320.

The ferocious anti-Taliban blitz came as Afghans on Saturday commemorated the fifth anniversary of Al Qaeda's killing of Ahmad Shah Massood, the fabled mujahedeen commander who battled the Taliban regime until his death two days before the Sept. 11, 2001 attacks.

It also followed Friday's car bombing in Kabul that killed at least 16 people, including two American soldiers, in the deadliest suicide attack in the Afghan capital since the late 2001 overthrow of the hard-line Taliban regime.

Afghanistan, particularly the southern provinces, is in the grips of a bloody contest pitting NATO, U.S. and Afghan forces against an array of insurgents, predominantly holdouts from the Taliban regime, which was ousted for harboring Al Qaeda leader Usama bin Laden.

NATO and Afghan troops destroyed three insurgent positions, a bomb-making factory and a weapons cache in the battles that killed more than 40 militants in Panjwayi, long regarded as a Taliban stronghold west of Kandahar city.

One NATO soldier was killed Saturday, the alliance said in a statement. The soldier's nationality was no released but Canadian forces are leading the Panjwayi push and have had at least five soldiers killed since the operation began.

Troops now occupy parts of Panjwayi and bordering Zhari district and reopened a section of highway that had been closed to civilian traffic during the operation, NATO said.

"We're making good progress everyday," said Canadian Brig. Gen. David Fraser, commander of NATO forces in southern Afghanistan.

"There is severe pressure on the insurgents remaining in the area, which will continue until they are either defeated or choose reconciliation through surrender."

Reporters cannot access the scene of the battle, so it wasn't immediately possible to verify the death toll.

A NATO spokesman, Maj. Scott Lundy, said the casualty count was based on reports from troops viewing the battlefield through weapons sights and other devices.

On Friday, NATO said it had killed another 20 to 30 Taliban in airstrikes and artillery barrages.

A top Taliban commander and a spokesman for the militia have strongly disputed NATO's claims.

Some 20,000 NATO soldiers and a similar number of U.S. forces are trying to crush the emboldened Taliban insurgency. The heaviest fighting is taking place across vast desert plains in southern Helmand and Kandahar provinces, also the center of the country's massive opium trade.

On Friday, NATO's top commander urged member nations meeting in Poland to commit 2,000 more troops to Afghanistan to help quell the insurgency, which has proved more intense than anticipated when NATO took command of the volatile south from a U.S.-led coalition on Aug. 1.

In Kabul, thousands of people including President Hamid Karzai, attended a memorial ceremony marking the assassination of mujahedeen leader Massood, killed in an al-Qaida suicide bombing in northern Afghanistan just before the Sept. 11 attacks.

"Massood was a great martyr for this land and like him, today, each son of this country is ready to sacrifice his life to make the nation free," Karzai said in a speech. "We are still not free and our nation's children are still being sacrificed like yesterday in Kabul when more people were martyred in a terrorist attack."

Massood was the most famous mujahedeen commander against the Soviet occupation of Afghanistan during the 1980s, and later led the resistance to the Taliban after they seized power in 1996.

Ali Shah Paktiawal, criminal director of the Kabul police, did not think Friday's bombing was timed to coincide with the Massood commemoration, saying terrorists used any opportunity to attack foreign forces. Police have made no arrests.

The U.S. military blamed "Taliban extremists" for the blast, which occurred 50 meters (yards) from the landmark Massood Square that leads to the main gate of the heavily fortified American Embassy compound. A purported Taliban spokesman claimed responsibility.

In New York, U.N. Secretary-General Kofi Annan condemned the attack, saying it reflected "an inexcusable disregard for the value of human life and only serve to undermine the country's transition," according to the spokesman for the world body's leader.