Reports indicate the commander was also involved with weapons and drug trafficking, the coalition said Saturday. The coalition bombarded the compound where he was hiding with several militants on Friday in the Musa Qala district of Helmand province, it said in a statement.
The building was destroyed, and "several militants" were killed, it said. "Multiple secondary explosions were also reported, indicating the presence of a sizable weapons cache."
Helmand Gov. Asadullah Wafa said Afghan and NATO forces were near Musa Qala town, while many villagers remained in their homes as the area was bombed and were refusing to shelter insurgents.
Taliban militants overran Musa Qala in February, four months after British troops left the town following a contentious peace agreement that gave security responsibilities to Afghan elders. Musa Qala has been in the control of Taliban fighters ever since.
"If we let the Taliban in, NATO will bomb our homes. We're trying our best not to let the Taliban into our homes," said Musa Jan, a resident of Musa Qala district.
Jan said NATO and Afghan security forces had dropped fliers from helicopters telling villagers: "Don't go outside your home. We want to bring peace to Musa Qala."
Taliban commander Mullah Ahmadullah told the AP by telephone that insurgents were strengthening their positions in Musa Qala and militants in nearby districts were pouring into the area for the battle.
"The morale of the Taliban is high. We will fight against NATO and Afghan forces. We will not lay down our weapons. We will fight until the death," Ahmadullah said as he commanded militants to take their positions.
Situated north of Helmand , Musa Qala and the region around it have seen the heaviest fighting in Afghanistan this year. It also is in the middle of the country's opium poppy-growing belt.
This year has been the deadliest since the U.S.-led invasion in 2001. More than 6,200 people have been killed in insurgency-related violence so far this year, according to an AP tally of figures from Western and Afghan officials.