KABUL, Afghanistan - NATO said Tuesday it was investigating the deaths of five civilians who were killed when coalition forces returned fire against insurgents shooting from a compound in the Sangin district of Helmand.

Two NATO service members were also killed by bombs in southern Afghanistan, the coalition announced.

The dead civilians were found after the exchange of fire, a NATO announcement said. It did not say when the battle took place. NATO said the insurgents were using a civilian home to attack coalition forces.

According to NATO, the insurgents attacked its troops with assault rifles and a machine gun from the compound, and the soldiers returned fire and used mortars.

"This is a tragedy. We are aware that insurgents purposefully stage attacks against friendly forces using innocent civilians' homes," said U.S. Army Lt. Col. Patrick Hynes, director of the Combined Joint Operations Center.

This year has been the deadliest in the war for U.S. forces. At least 486 American troops have been killed, compared with 317 last year and 155 in 2008. NATO forces overall, including the Americans, have lost nearly 700 troops so far, making this the deadliest year for international forces in the almost 10-year-old war.

A U.N. report this month found that civilian casualties increased by 20 percent in the first 10 months of 2010 compared to the same period in 2009. They quoted a preliminary figure of 6,215 conflict-related civilian casualties, made up of 2,412 deaths and 3,803 injuries.

More than three-quarters of those casualties were linked to insurgents, an increase of 25 percent compared with last year. Casualties attributed to NATO and pro-government forces dropped by 18 percent compared with the first 10 months of 2009, the quarterly U.N. report said.

Tough fighting in Sangin and other parts of south and west Afghanistan has resulted in higher casualties, both among troops and civilians.

NATO forces, most of them from the United States, are waging a campaign against the Taliban in Helmand province in southwestern Afghanistan. Most of the fighting takes place in the Sangin district. The international coalition has been pouring troops into Afghanistan's south, mainly in Kandahar and Helmand, where the Taliban remain particularly active.

NATO said two of its service members were killed Tuesday after roadside bombings in southern Afghanistan.