With elections approaching in August, Karzai also denied that Afghanistan was a narco-state or a failed state and insisted that vast progress had been made over the last seven years.

"This is the right time for me to call for a process of reconciliation," he said at a major security conference in Germany, addressing an audience that included top US and European officials.

"We will invite all those Taliban who are not part of Al-Qaeda, who are not part of terrorist networks, who want to return to their country, who want to live by the constitution of Afghanistan and who want to have peace in their country and live a normal life, to participate, to come back to their country."

Karzai is set to stand again in presidential elections on August 20, but his popularity has waned amid allegations of government corruption, growing opium production and an ever-more tenacious Taliban-led insurgency.

NATO nations and their partners fighting the Taliban in Afghanistan have had mixed reactions to Karzai's proposals to talk to the insurgents, with many saying they reject talks with militants who have blood on their hands.

"I would request the international community to back us in this, fully, and be of one view on this, not of divided views on this," Karzai said.

Karzai raised eyebrows in November when he said he would protect the fugitive leader of the insurgent Taliban, Mullah Mohammad Omar, in return for peace whether his international partners liked it or not.

He insisted though that the extremist Islamic leader, who is wanted by the United States, would have to accept the Afghan constitution, a pro-democracy document drawn up after the US-led forces ousted the Taliban regime in 2001.

The second-in-command of the Al-Qaeda terror network, Ayman Al-Zawahiri, has said that Afghanistan's attempt to negotiate with the Taliban showed weakness.

Karzai also renewed calls for international troops fighting the Taliban to do more to avoid civilian casualties, which have also served to damage his popularity among Afghans.

"The Afghan people consider themselves partners, and partners must not find themselves under attack," he told the conference participants, including US National Security Advisor General James Jones.

There are regular allegations of civilian casualties in operations, most often air strikes by US forces, but there are conflicting statements about how many people have been killed or wounded.

International commanders have confirmed a little more than 200 ordinary Afghans died in military operations last year but the figure given by the United Nations is about four times as high.

Jones acknowledged the NATO-led International Security Assistance Force (ISAF) faced a major challenge in confronting the Taliban, but he insisted the alliance could not afford to fail.

"Given the nexus of terrorism and extremism, drugs and proliferation, we cannot afford failure in Afghanistan," he said.

Jones underlined that the administration of US President Barack Obama "will work closely with NATO and with the Afghan and Pakistani governments to forge a new comprehensive strategy to meet achievable goals."

Despite the challenges, and in the face of widespread criticism both inside Afghanistan and abroad, Karzai insisted that he could turn the strife-torn country around.

"We are not a narco-state," he said. "Afghanistan was a destroyed state, not a failed state."

"With the right approach, and the adoption of a new strategy as I envision, Afghanistan is a true and sure success, and we already have it," he concluded.

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