(CNN) Four days after the Taliban launched its most serious challenge to the authority of Afghanistan's government in three years, heavy fighting was taking place in the streets of Ghazni , a city in the east of the country. The UN has urgently called for humanitarian assistance for Ghazni's quarter of a million civilians.

Peace it is not.

But that is what Afghanistan was occupied by only weeks ago.

A brief ceasefire over the Eid holiday gave Afghans their first glimpse of the quiet life after 17 years of America's war here -- and possibly nearly four decades of war in general, depending on who's counting.

The US hinted that it had pursued direct peace talks with the Taliban in Doha, removing a long-held insistence that any talks had to be Afghan-to-Afghan. Things are changing diplomatically, but not on the battlefield.

Instead, Ghazni is "a battlefield since Friday morning, with fighting and clashes reportedly still ongoing," said Dr. Rik Peeperkorn, the UN's acting humanitarian coordinator for Afghanistan.

Afghan President Ashraf Ghani tweeted that "further reinforcements should be dispatched to the province on urgent basis."

He cited operational gains, but it is clear that Ghazni remains in extreme turmoil and earlier assurances from the Afghan military that the Taliban assault had been rebuffed were on the fallacious side of optimistic.

Wais Barmak, Afghanistan's interior minister, said in a press conference on Monday that the Taliban's claims -- such has having taken over the Ghazni police headquarters and prisons -- are false. He added that Afghan forces had repulsed all attacks from the Taliban and that the city is under the Government's control.

However, CNN has spoken to Ahmad Reshad Mongory, an Afghan activist with relatives trapped in Ghazni who claim that Taliban fighters are roaming the streets freely. The situation, he says, is so fraught that a large part of the city is under insurgent control and no one dares claim the tens of dead bodies lying in the street.

The ongoing fighting makes a transparent and complete view of the situation near impossible to obtain.

Lt. Col. Martin O'Donnell, a spokesman for the US military in Ghazni, said that the city remains under Afghan government control and the insurgents do not "pose a threat to its collapse as some have claimed."

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He said, however, that "sporadic" clashes were happening around the city as Afghan forces were taking their time flushing out Taliban fighters so as to protect the civilian population they were hiding among.

He said that US personnel were on the ground in an advisory role and US air power had killed 140 Taliban since August 10, with two airstrikes on Monday morning alone. He denied reports that the main highway leading out of Ghazni -- Highway 1 -- was blocked by the insurgency.

There are three reasons why the attack on Ghazni matters -- whether or not the Taliban manages to retain control in the face of American air power, which normally unseats them from most places once it's fully in effect.

First, this is a city, and the focus of US strategy now -- and going forward -- is to be sure that the government controls cities.

Rather we have an insurgency that appears to have taken over large parts of a strategically vital hub for hours, and then either kept up unrelenting pressure on security forces inside -- or depending on which reports you believe -- roamed the city freely for days.

If the government's and the US's focus is on urban areas -- and urban areas can fall even partially to the Taliban -- that shows extraordinary weakness and will cause confidence in security forces and the Afghan government to lessen further.

Second, this removes any doubt that the Taliban is approaching future peace talks from a position of strength. The US and Afghan government line has long been that its military superiority means eventually the Taliban will tire and talk.

Instead -- even by the US's own figures -- it is holding on to territory at a time when the Afghan government's five-year security plan suggested the Taliban should be losing it fast.

The Afghan government has said it wants to control the territory in which 80% of the population lives by the end of 2019. It currently controls 65%, up from 64% this time last year.

Third, the way in which information has emerged about this offensive does not inspire confidence that the Afghan government and US military are prevailing.

There were quick assurances that the Taliban had been pushed back to the outskirts shortly after Friday. But as of Monday, a local activist reported bodies lying in the streets, with the Taliban freely roaming around, and a local member of parliament reported heavy clashes.

O'Donnell, the US military's spokesman, said again on that: "Tactically, operationally and strategically, the Taliban achieved nothing with this failed attack except another eye-catching, but inconsequential headline."

Yet the headlines persist, and it is curious that a US military statement would focus on that headline.

The last time a major urban center was attacked by the Taliban was Kunduz in 2015, which lasted only a matter of days, yet showed cities were not impregnable. Now, the supposed safe bubble of Kabul is regularly penetrated.

The focus of the strategy is keeping cities safe and ensuring that valuable Afghan security personnel aren't stuck out protecting empty rural areas. Three years later, Ghazni is in turmoil, dozens are dead and America's longest war is no nearer its end.

Ehsan Popalzai contributed to this report.