A rebel Taliban commander from Afghanistan's minority Shia Hazara community was killed while attempting to flee to Iran, the defence ministry said on Wednesday, denying local reports suggesting he was murdered in captivity.

Mahdi Mujahid's split with the Taliban leadership in June is the highest-profile public division seen in the hardline group since they returned to power in August last year.

He was appointed intelligence chief of Bamiyan province at the time, but months later was sacked following a dispute that local media attributed to control of the lucrative coal trade.

Mujahid went on the run in June after the Taliban sent thousands of troops to crush his loyalists.

Days of fighting raged, with the United Nations estimating at least 27,000 people were displaced by the violence.

Afghanistan's mostly Shia ethnic Hazaras have faced persecution for decades, and Mujahid's appointment was initially seen as supporting the Taliban's claim of being more inclusive to non-Pashtuns.

On Wednesday, officials said border forces identified Mujahid in Herat province, near the frontier with Iran, and “punished him for his deeds”.

“He didn't have anyone with him,” provincial information officer Naeemul Haq Haqqani told AFP, adding he was “killed after a conflict”.

Pictures circulating on social media, however, purported to show Mujahid alive and in custody. Haqqani dismissed those reports.

“Rumours that this person was captured alive are lies,” he said.

The Taliban were accused of abuses against the Hazaras when they first ruled Afghanistan from 1996 to 2001.

The Hazaras are also the target of attacks by the militant Islamic State group, which considers them heretics.