Though the Western-backed government in Kabul pushed the insurgents back with the aid of US airstrikes in August, it is struggling to reverse the tide of the fighting.
Capturing the city would give the Taliban their first provincial capital since the northern city of Kunduz fell briefly a year ago and would reinforce the impression that government forces are losing momentum in the war.
The insurgents, who control large sections of the opium-growing province, are now in Bolan, an agricultural zone that links Lashkar Gah with Gereshk, a town that straddles the main Highway One, as well as Marjah district centre to the west.