KABUL (Reuters) – Thousands of residents have fled or face deteriorating conditions as fighting between Afghan forces and Taliban militants entered its third day in the embattled northern city of Kunduz, officials said on Wednesday.

Taliban fighters easily penetrated the city’s defenses on Monday, raising questions about the capacity of the Western-backed security forces, even as international donors meet in Brussels to approve billions of dollars in new development aid for Afghanistan.

“Most civilians have abandoned Kunduz city and have gone to neighboring districts or provinces,” said Kunduz provincial governor Asadullah Amarkhel. “There is no electricity, no water and no food. Many shops are closed.”

Government troops, backed by U.S. special forces and air strikes, have made slow but “significant” progress in clearing the city, said Kunduz police chief Qasim Jangalbagh.

He acknowledged, however, that the situation remained dangerous for many residents.

“There are security problems in the city,” he said. “People do not have enough food, water and other needs so they are evacuating the city to go to safe places.”

In social media posts, the Taliban rejected claims that the government had retaken Kunduz and accused security forces and U.S. troops of committing abuses against civilians.

The U.S. military command in Kabul said there was “sporadic” fighting within Kunduz but Afghan security forces controlled the city.

American aircraft conducted at least two air strikes on Wednesday to “defend friendly forces who were receiving enemy fire”, the military said in a statement online.

“The city is locked down,” said Hajji Hasem, a resident leaving Kunduz with his family on Wednesday. “If the Taliban and air strikes do not kill you, hunger and thirst will.”

Increased attacks by insurgents hoping to topple the Western-backed government and install Islamist rule have tested the Afghan security forces who are struggling to defend major cities and roads a year and a half after a NATO-led force declared an end to its combat mission.

The violence has displaced nearly 1 million Afghans within the country, according to the United Nations, and contributed to an exodus of tens of thousands to Europe and other areas.

The two-day, EU-led donor conference in Brussels is seeking fresh funds despite Western public fatigue with involvement in Afghanistan, 15 years after the U.S. invasion that ousted the Taliban weeks after the Sept. 11, 2001, attacks on the United States.

(Reporting by Afghanistan bureau; Writing by Josh Smith; Editing by Robert Birsel)