Heavy fighting took place between Iran's border guards and the Taliban along the border, Wednesday, in north-eastern Iran, with reports of casualties on both sides, Anadolu News Agency reports.
The clashes erupted when the Taliban reportedly overran the Dost Mohammad and Bala Siah Cheshman border posts belonging to Iran in the Shagalak area that connects to Nimroz province.
Fighting was fuelled by a wall that Iran has been constructing along its largely porous border with Afghanistan, to prevent illegal crossings and drug trafficking, according to reports.
The Taliban claims that the wall is constructed on the zero point of the border, and not on the Iranian side. Tehran rejects the claim.
On Wednesday, the Taliban allegedly targeted farmers who came close to the wall that the group claims is the zero point, reports said.
It prompted Iranian border guards to open fire at the Taliban across the border, resulting in fierce clashes that lasted more than five hours.
Videos shared online showed border checkpoints set ablaze by the heavily armed Taliban fighters, with complete chaos at the border point.
Iranian officials have not yet commented on the seizure of border checkpoints or reports of casualties.
But state-run news agencies attributed the clashes to "border misunderstandings" while refuting reports about the seizure of border posts by the Taliban.
The fighting has reportedly stopped with officials from both sides expected to meet.
The Taliban, which swept to power in Afghanistan in August by overthrowing the US-backed government in Kabul, has shared warm ties with Iran in recent years.
There have been regular meetings between officials since the Taliban announced an interim government but it has not yet been recognised by Tehran.
Iran and Afghanistan share a nearly 1,000-kilometer (621-mile) rugged border that remains largely insecure and porous because of the difficult terrain.