Recent high-resolution imaging observations with Chandra have unveiled a striking similarity between the Narrow Line Region (NLR) and the diffuse soft (0.1-keV) emission-line dominated X-ray morphologies in a number of obscured Active Galactic Nuclei (AGN) on scales as large as 0.1-2kpc (Bianchi et al., 2006, A&, 448, 499). This discovery suggests a strong link between these components, which points toward a common physical origin. AGN photo-ionization is a natural explanation, consistent with soft X-ray high-resolution spectroscopy (Guainazzi & Bianchi, 2006, submitted). However, the possibility that the bulk of this component is generated by ‘local’ photo-ionization induced by shocks in the interaction between a radio jet and the interstellar matter, or by mechanical heating in regions of intense star formation cannot be ruled out yet.