The militants killed about 50 villagers, including women and children in Mirzawalang -- a mainly Shiite village in Sayad district of northern Sar-e Pul province -- on Saturday after overrunning a government-backed militia, said officials.
The insurgents also took a number of residents captive, but released 235 hostages late yesterday after elders and provincial officials struck a deal with the group.
Survivors fleeing the violence described nightmarish scenes, detailing how the militants went from house to house, shooting villagers.
"Since my mother was too old to walk, she was left behind, I don't even know what has happened to her," he added.
Villager Yasin Abuzar said IS and Taliban fighters cut off the main roads to the area before launching a killing spree.
"I could only rescue my kids. When they entered our village they opened fire at everyone indiscriminately, they didn't even spare women and children," he said, adding that hundreds were still missing.
Local officials called for more aid as hundreds of displaced arrived in the provincial capital.
"The families who have come to Sar-e Pul city need shelters and food. They are living in the mosques, schools, with their relatives and some even on the streets," Zabiullah Amani, a provincial spokesman, told AFP.
"If aid agencies don't help we will face a humanitarian crisis," he added.
The villagers said most of those killed were Shiites and Hazaras who were either shot or beheaded.
Last week two suicide bombers killed more than 33 worshippers at a mosque in Afghanistan's western city of Herat, in an attack claimed by group.
A resurgent Taliban, whose ranks are mostly made up of Sunni Muslim ethnic Pashtuns, is at the peak of its summer fighting season.
The Taliban confirmed capturing Mirzawalang but said it did so alone. It has also denied allegations it had killed civilians.
Army spokesman Nasratullah Jamshidi said Afghan forces launched an operation today to retake the district.
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