By mid-afternoon, fighting was still underway in the area to free 21 remaining hostages, officials added. On Monday morning, the Taliban ambushed a convoy of three buses travelling on a road in the Khan Abad district, and forced everyone to come with them, according to Nasrat Rahimi, deputy spokesman for the Interior Ministry.
Rahimi said that after Afghan security forces freed 149, the insurgents were still holding 21 hostages from the buses. He added at least seven Taliban fighters have been killed in the fighting so far.
The ambush came despite Afghan President Ashraf Ghani's announcement of a conditional three-month cease-fire with the Taliban during the Muslim holiday of Eid al-Adha this week.
In June, the Taliban observed a government cease-fire over the three-day Eid al-Fitr festival, leading to unprecedented scenes of government soldiers and militants embracing on front lines, and raising hopes for talks.
But one of the Taliban commanders said the June cease-fire had only helped US forces, who the Taliban are trying to drive out of the country.
AP and Reuters contributed to this story.