A US coalition spokesman on Tuesday estimated that at least 33 people were killed. Afghan intelligence reports put that number at 20.
Coalition forces said they were provoked after seeing "large groupings" of insurgents armed with heavy machine guns and rocket-propelled grenades.
But an Afghan army officer said the fight started after Taliban fighters attacked coalition and Afghan forces in Tani, a district that borders Pakistan.
Colonel Mohammed Israr, an Afghan battalion commander in Khost, said that the group of about 50 Taliban fighters had crossed from Pakistan and retreated in that direction under heavy coalition fire.
However, Lieutenant Nathan Perry, the coalition spokesman, said the clash took place about eight kilometres from the border and "did not involve Pakistan".
Clashes between Taliban fighters and security forces are intensifying in the southern half of Afghanistan. Since the beginning of the year, more than 2,100 people have died in the violence, according to an Associated Press tally.
Taliban fighters have suffered the heaviest losses, but casualties among foreign troops are also rising.