Wellington, March 2 NZPA - Special Air Services (SAS) troops first confirmed battle action in Afghanistan was observed by a French photographer who described them as operating quietly.

Prime Minister John Key confirmed yesterday up to 15 SAS troops were fired upon on Friday, in an incident which left at least 16 people dead.

"Up to 15 SAS personnel accompanied an Afghan unit responding to an incident where a car bomb had been exploded and then a building occupied by insurgents," Mr Key told reporters.

"During the incident, some members of the SAS were fired upon by insurgents, and they returned fire."

Mr Key said some of the insurgents were wounded, but they had blown themselves up before they could be detained.

French photographer Lionel de Coninck told TV3 he took photos of the New Zealand soldiers after a 90-minute battle inside a guesthouse.

"The SAS guys, they went straight into the hotel and the whole street was blocked by police," said de Coninck. "We could not see what was exactly going on in the guesthouse. After an hour, hour-and-a-half of fighting inside the hotel, they walked right out and left the scene pretty quietly and armed."

None of the about SAS personnel involved was injured in the incident, which was in an area of residential hotels in Kabul rented by Indian Embassy workers and other foreigners.

The violence followed attacks on India's Embassy in Afghanistan in July 2008 and October 2009.

Among the dead were six Indians and two other civilians, as well as the insurgents, Mr Key said.

The SAS last year returned to Afghanistan, training an elite group of Afghan commandos known as the Crisis Response Unit.

Mr Key said then the SAS would not fight alongside the Afghans they would be training because it was "particularly dangerous".

However, this is the second incident they appear to have been involved in alongside the Afghans; in January, a photo was published of Victoria Cross winner Corporal Willie Apiata and an unidentified colleague taken moments after they came out of a building where three bodies were found.

The photos were taken by French freelance photographer Philip Poupin, who said the men were there to fight and he personally saw three dead bodies in the building they came out of.

Mr Key today said the SAS was in Afghanistan to "act on what is required of them".

"Some of that is combat, as I've said before."

Green Party MP Keith Locke said New Zealand needed to rethink its involvement in the area.

"The foreign occupation forces don't seem to be improving the situation," he told NZPA.

"So I think New Zealand should rethink whether we really want to have active combat troops there and whether, in terms of the general progress of the war, another strategy is appropriate."

Helping the Afghan people through reconstruction would be more appropriate, Mr Locke said.

The New Zealand Defence Force has a 140-strong provincial reconstruction team in Bamiyan province. New Zealand troops have been in the area since 2003 but the Government intended to gradually withdraw them.

The SAS started this deployment to Afghanistan -- its fourth -- last September, and has made a commitment to maintain about 70 personnel for up to 18 months, in three rotations.