The Islamic State claims to have seized Osama bin Laden's infamous Tora Bora mountain hideout in eastern Afghanistan.
A black-and-white flag was hoisted above the huge cave complex according to a radio bulletin by the Islamic State in Iraq and the Levant (Isil), which also claimed to have taken over several nearby villages.
"Those areas around Tora Bora were a Taliban stronghold, but now Daesh militants captured them during fighting," the police commander in the area, Shah Wali, said, using an Arabic term for Islamic State.
The Taliban said the group occupied areas around Tora Bora, in Nangarhar province, but denied the group had captured the caves.
Zabiullah Mujahid, a Taliban spokesman, told the Telegraph up to 40 Isil fighters were killed in clashes yesterday/Thursday, and a handful arrested.
Nangarhar borders with Pakistan and is the main foothold of Isil's Afghanistan cell, which emerged two years ago and has vowed to replace the Taliban as the dominant jihadist force in the region.
The Afghan chapter is believed to have drawn dozens of Taliban fighters into the fold and hopes to eventually topple President Ashraf Ghani.
The capture of Tora Bora would mark a significant symbolic victory for Isil and grant it a major tactical advantage in their clashes with the Taliban.
The assault on Tora Bora comes two months after the United States dropped the largest non-nuclear bomb in the world - known as the Mother of All Bombs - in Achin, southern Nangarhar, killing at least 92 Isil fighters.
"After Achin, Daesh was looking for a second stronghold and now they have it," Mr Wali said.
Alim Eshaqzai, the deputy governor of Nangarhar, said President Ashraf Ghani has dispatched the country's 201st army corps to flush out the remaining fighters.
Inside the mountains lies a vast network of caves in which al-Qaeda militants led by bin Laden hid from US coalition forces in 2001, following the September 11 attack on the Twin Towers in New York.
US special forces, backed by British troops, spent two weeks attacking the cave complex in December 2001, in a search that failed to turn up bin Laden.
Bin Laden eventually fled Tora Bora to the northeastern Kunar province, before crossing the border into Pakistan, where he hid in a compound in the garrison town of Abbottabad.
He was then killed in a raid by US Navy Seals in May 2011, which sparked a major diplomatic row as furious Pakistanis complained that the raid violated their sovereignty.
The United States estimates there are about 800 IS fighters in Afghanistan, mostly restricted to Nangarhar. Other estimates say their ranks also include thousands of battle-hardened Uzbek militants.
Last week Russia announced it was reinforcing two of its bases in Central Asia, in Tajikistan and Kyrgyzstan, with its newest weapons because of fears of a "spill-over of terrorist activities from Afghanistan" by the Afghan Isil chapter.
"The group's strategy to establish an Islamic caliphate poses a threat not only to Afghanistan but also to the neighboring countries," Russian Defense Minister Sergei Shoigu said.