Militants on the evening of August 2 detonated a auto bomb outside a prison in the provincial capital of Jalalabad and engaged in an hours-long gun battle with security forces.
The prison holds more than 1,700 inmates - majority Taliban and IS fighters, a security source told news agency AFP.
As security forces swept through the prison, they found the bodies of two Taliban prisoners apparently killed by the Islamic State group.
The Islamic State group's affiliate in Afghanistan, known as IS in Khorasan province, claimed responsibility for the attack.
Several people have been killed and dozens wounded in an Islamic State terrorist attack on a prison in the eastern Afghan province of Nangarhar. Casualties were likely to rise, said Attaullah Khogyani, a spokesman for the provincial governor.
Some of them were holed up in a building outside the prison compound, while few had managed to take position in one of the security towers inside the compound and were preventing security forces from entering, the source said.
The attack occurred one day after Afghan special forces announced they had killed the intelligence chief of the Islamic State's Afghan headquarters in Jalalabad.
President Ashraf Ghani and the Taliban have both indicated that long-delayed negotiations could begin immediately after the Eid al Adha festival, which took place in Kabul on Thursday.
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The report said the United Nations had recorded 17 attacks by Daesh that caused civilian casualties during the first six months of 2020, down from 97 attacks in the same period a year ago. He said 10 IS attackers were also killed in the operation and that the assailants killed five prisoners, including two members of the rival Taliban, before the raid ended.
The peace accord aims to recruit the Taliban to battle the militants from IS, which US officials have told The Associated Press is the Americans' biggest foe in Afghanistan.
The report credited the drop in casualties in part to the reduction of operations by global forces - which now only acted when called upon and in support of the Afghan forces - and also to a decrease in the number of attacks by IS.
New Delhi, which has pledged more than $3 billion in aid for reconstruction since 2001 when the US-led coalition dislodged Taliban from Kabul, is keen to see an India-friendly administration in Afghanistan. Khyogyani said about 1,000 prisoners who earlier escaped had been found by security forces across the city. A second, crucial round of negotiations between the Taliban and the leadership in Kabul has yet to start.
Of the 1,793 prisoners, over 1,025 had tried to escape and been recaptured, while 430 had remained inside the prison.
After the Taliban protested, even threatening violence would be resumed, President Ghani said he would convene a meeting of "elders" or a Loya Jirga to decide on the matter, which is now expected on Friday.
Nangarhar province has seen some deadly IS attacks this year including a May 12 suicide bomb that killed 32 mourners at a funeral for a police commander.