The International Institute for Strategic Studies (IISS) lamented growing signs that the insurgency was expanding from the south of Afghanistan into northern provinces, with rebels learning lessons from Iraq.

Elsewhere in its report "The Military Balance 2008", the London-based think-tank noted progress by the so-called surge in Iraq, but warned that US and other troops face being in the country for a generation.

In Afghanistan, the annual study said the NATO-led operation was most at risk where its technical advantage was reduced, particularly in eastern Afghanistan, the scene of intense fighting with militia.

"Failure in these actions would risk boosting Islamic extremism (not just in Afghanistan), would produce a failed state in an area of strategic importance, and would offer safe haven to terrorist organisations and the narcotics trade.

"It would also undermine the credibility of NATO in its first major out-of-area combat operation," the study said.

The IISS said that although NATO's 41,000-strong force was bolstering President Hamid Karzai's fledgling government, the administration "still lacks authority in much of the country."

The report echoed warnings last week from two US think-tanks which said troop levels had to be ramped up and major changes had to be implemented urgently.

The IISS report comes a day before US Secretary of State Condoleezza Rice arrives in Britain for talks on NATO and Afghanistan after calls from both countries for other alliance members to pull their weight, with Germany and France under the spotlight.

Military commanders in Afghanistan reckon an extra 7,500 troops are necessary.

NATO defence ministers are to meet in Vilnius on Thursday and Friday.

"This is a critical week for the alliance," said Christopher Langton of the IISS.

"There is a big question over countries' ability to sustain operations for what is now coming to a seventh year, and that is a weakness in NATO which perhaps it had not forseen when it set out on this venture.

"At the moment (the Afghan government) is being led by the nose. If it is undermined every time it takes a decision by its international allies, that reduces its authority across the country," he added.

IISS director-general John Chipman said: "Lack of coherence bedevils many aspects of the campaign and further undermines President Karzai's authority."

On Iraq, where US President George W. Bush announced a "surge" of about 30,000 American troops, adding to the 132,000 already in the country a year ago, the IISS said the security situation remains "highly volatile".

While violence towards military and civilians was "dramatically" down, "criminality, intra-communal military violence and sectarian strife remain commonplace, and still undermine political and economic initiatives."

And it warned that "even if (troop) reductions can happen in 2008, it is estimated that President Bush's successor will inherit a situation whereby at least 100,000 troops are still stationed in Iraq."

IISS expert Dana Allin said: "There is arguably going to be less of a dramatic change (post-Bush), mainly because the changes have already come.

"The salience of a policy of pre-emptive war has been lowered anyway."

According to the IISS, the Iraqi Army is "a generation away" from being able to operate free of US logistical support.

But the study's most pressing warning was on Afghanistan, where it said there was a "gradual proliferation of insurgency and terrorism into Afghanistan's northern provinces."

Noting an increase in suicide attacks, it warned of signs "not only that the insurgency was spreading geographically but also that tactical lessons and techniques had migrated from the insurgency in Iraq."

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