The fighting started when a suicide bomber blew himself up at the gate of the exchange market in Gereshk district, killing three guards and two others, according to Razia Baluch, a provincial council member from Helmand.
Three attackers entered the market, and fighting between the militants and the Afghan security forces is still ongoing, she said.
"We are hunkered down inside and can't go outside for fear of getting shot," said Mawlawi Ahmad, an elder from Gereshk.
The actual target might have been the district governor's building nearby, but the militants were identified before they reached their target, Baluch said.
The attack was on an Afghan security force base and other government institutions, Taliban spokesman Qari Yosuf Ahmadi said via Twitter.
Gereshk district has been a centre of fighting between Taliban and Afghan security forces for several weeks. A mistaken US airstrike on July 21 killed 16 people and wounded two Afghan security force members in the district.
The Taliban control at least 80 per cent of Helmand province and have intensified attacks in neighbouring Uruzgan and Kandahar provinces.
The Taliban control at least 80 per cent of Helmand province
At least five people have been killed after Taliban militants attacked a money exchange market in Afghanistan's embattled southern Helmand province early Friday morning, locals and officials said.
