Australian special forces soldiers may have inadvertently shot dead Afghan district governor Rozi Khan, defence head Angus Houston has admitted.
The Australian Defence Force (ADF) was working with the governor's tribe to ensure his death had no negative consequences for operations in the region.
Air Chief Marshal Houston says a very confused situation is still under investigation.
"But, you know, it certainly looks that way," he said when asked whether Australian troops had shot the governor.
"But we don't know at this stage. We really need to complete our investigation."
In the incident on September 18, Australian special forces soldiers came under fire during a patrol in the Oruzgan district capital Tarin Kowt.
Defence promptly confirmed that Chora district governor and tribal leader, Rozi Khan, was among those killed but said it was not possible at that time to confirm if he was killed by ADF fire.
News reports indicated Governor Khan and his bodyguards had been mistaken for Taliban insurgents.
Australian troops fired back in self-defence and it appeared they acted in accordance with their rules of engagement and their actions were appropriate for the situation, Defence said.
Immediately afterwards, Defence launched an inquiry as did the International Security Assistance Force and Afghan authorities.
Air Chief Marshal Houston said he had been briefed on the incident and was familiar with the details.
"I am very happy with how we are managing the incident," he said.
"We deeply regret his death. We are working very closely with his tribe to ensure that this has no far-reaching negative effects on our operations in the province of Oruzgan."