Coalition attack claims 50 lives
Although it was impossible to verify Nato's body count, their figures would make it one of the bloodiest battles for insurgents this year.
It came amid reports that British special forces were still hunting the accomplices of two British nationals who were arrested in Afghanistan last week on suspicion of plotting to attack "UK interests".
The Ministry of Defence said the pair - a man and a woman - were being held at an unnamed detention facility in Kandahar, and officials refused to say whether they had been given access to lawyers.
Analysts said the American clearance operation, in eastern Paktika province, seemed to confirm earlier warnings that the focus of the war in Afghanistan is shifting east - away from Kandahar and Helmand, in the south, where most of Britain's troops are based.
Militants used rocket-propelled grenades, heavy machine guns and assault rifles to try and repel the coalition's night time attack, Nato's International Security Assistance Force said in a statement.
"The insurgents … engaged the force from several locations, including cave sites and fortified bunkered fighting positions," the statement said.
"The encampment site was a staging area for Haqqani and foreign fighters," it added, in a reference to an insurgent group loyal to Jalaluddin Haqqani and his son, Sirajuddin.
"These fighters were moved into the country by Haqqani insurgents who planned to use them for attacks throughout Afghanistan," the statement added.
Officials said at least 30 insurgents were killed on the first night of the operation, and a further 20 died the following day.
"The combined force continued to clear the area into the morning and was intermittently engaged by insurgents throughout the day," the statement said.
"The force continued to respond to the enemy's armed engagement, employed small arms fire and air strikes to counter the insurgent threat. More than 20 additional insurgents were killed as a result."
THE Haqqani network - one of the three main insurgent groups fighting in Afghanistan - is widely seen as one of the most sophisticated, with closer links to al-Qaeda and Pakistan's intelligence service, the ISI, than either the Taleban or other militants.
Nato accused Haqqani fighters of staging the attack against Kabul's InterContinental Hotel last month, which left at least 11 people and the seven attackers dead.
They were also blamed for a similar "complex attack" against Kabul's five-star Serena Hotel in 2008, as well as a raid on the ministry of justice in 2009.
The Haqqani network is smaller than either the Taleban, or Hezb-i-Islami, but it is also considered the least likely to negotiate a peace deal. It is strongest in the remote mountains, south east of Kabul.