WASHINGTON -- A lack of concentration on Taliban sanctuaries and the unnecessary harassment of Islamic militants who remain in their homes are the two biggest mistakes the United States has made in conducting the war in Afghanistan, Afghan President Hamid Karzai told FOX News on Friday.
The Afghan president, who was in town after meetings with President Obama and Pakistani President Asif Ali Zardari earlier this week, said both regional leaders told American officials that direct security and development aid for residents of the border region is the No. 1 priority for winning the hearts and minds of their nations' citizens.
The northern border area "has been misused for years," Karzai said. "The people of that area have been made captive of the radicals. Their social structure has been attacked and undermined. In the past three years, five tribal leaders in Waziristan have been killed. In Kandahar almost all have been killed.
"We were not able to protect our civilian leaders against terrorism. What the world should do is help our communities protect their leaders. We need to bring back the values that have been undermined. That has to be revised drastically," Karzai said.
Karzai briefed a small group of reporters because of what he said are fundamental misperceptions in the United States about his country.
"The Taliban and Al Qaeda often communicate with the outside world better than we do," he said, adding that he has deep gratitude to the U.S. for joining Afghanistan on a "journey that began seven years ago -- The War on Terror. "
However, he said that "a War on Terror cannot only be won with financial resources or military power. You have to have a higher moral platform."
"The War is not in Afghan homes. It is in the sanctuaries and training grounds and the financial system that backs it," Karzai said, noting that his he is satisfied from his meetings with Obama that the two nations "are now on a platform of seeing eye to eye on the issues."
Karzai faces re-election in August, and Friday marks the deadline for presidential nominations. The president said he expects the election will be conducted fairly.
"This time the Afghan community is more capable. If anyone in the government wants to intervene they can," he said, making a pitch for his re-election. "I was the first democratically elected president of Afghanistan, that's a great honor and I'd like to keep it ... I took the country through hell and fire the past seven years."
Karzai said his "greatest achievement" so far was making Afghanistan "home for all Afghans" and creating consensus politically.
But consensus does not always lead to cooperation, he acknowledged. For one, many Mujahideen resistance fighters who were initially part of the fledgling government have become disenfranchised.
"We began seven years ago with every element in the pot with us. The Mujahideen who were part of the administration had to give away their posts to experts from abroad. Those who had fought against the Russians felt sidelined. We want Afghanistan to be a lot more united," he said, noting India's model of a robust and independent bureaucracy based on "a civil service unaffected by politics."
As for possible political reconciliation with Taliban elements and some kind of "peace process," Karzai said that he thinks the Saudi process backed by the United States is one method. Saudi Arabia has offered to mediate between Afghanistan and the Taliban, who are strongly influenced by the Arab kingdom. Saudi participation would also curb Iranian efforts to gain regional power.
"It will be done in segments on different levels," he said of any reconciliation with the Taliban.
Political reconciliation and consensus will be needed to tackle some of Afghanistan's biggest problems. Corruption and a chronic narcotics trade have devastated the country's progress. Afghanistan produces 90 percent of the world's heroin and opium, and the central government has little control over many provinces.
"Where the Afghan government is in charge the poppies are gone. Where we are not in charge, in areas like Hemland, the poppies are rising," he said, noting that one area where Iran and the U.S. could find cooperation is in fighting the narcotics trade.
"We fully back Americas call for engagement with Iran. The Iranians are among the best in efforts against narcotics, that's the only meaningful activity in the region," he said.
Karzai said corruption is not limited to local leaders, but is a problem among the contractors and subcontractors employed by nations that have donated financial assistance, reconstruction aid and manpower to Afghanistan.
He cited a World Bank report of 2008 that said the Karzai government was more efficient than widely perceived at distributing donor funds. Finance Minister Hazrat Omar Zakhilwal, who appeared with Karzai, said 22,000 villages in 34 provinces have received funds distributed by the government.
"When we speak of corruption we mean when large sums of money are lost in the process of contracts and subcontracts," Karzai said. "Of the $32 billion that the world has given us, only $6 billion has gone to the Afghan government. We are fully accountable and responsible for the $6 billion spent through our government."
A World Bank official told FOX News that the bank did not say no corruption has been seen with funds that go directly to the Afghan government, but that the Afghan government has created adequate processes and safeguards which mitigate the risk of corruption. The official added that the money is going to the purposes outlined in the budget and has resulted in
demonstrable achievements that make the nation more accountable.
For these reasons we have long been strong advocates that donors should put more
funds through the Afghan national budget (all of the World Bank's own assistance
goes through the budget), and we have taken actions to facilitate this, like
establishing and administering the Afghanistan Reconstruction Trust Fund.
Karzai said an attack in the province of Farah on Monday that reportedly caused the greatest civilian casualties since the fall of the Taliban in 2001 has stoked anger among ordinary people and inflamed local populations. As many as 147 people reportedly were killed when U.S. troops launched an aerial attack after being called in by the Afghan police force overwhelmed by fighting with Taliban militants.
Pakistan has also warned about aerial and drone attacks on high value targets, which officials say just stirs support for the Taliban. However, a joint U.S.-Afghan investigation is underway over the air strike after NATO's top commander in Afghanistan, Gen. David McKiernan said Wednesday that preliminary evidence suggests at least some of the casualties were not caused by the U.S. bombardment.
"There is no doubt that the casualties were high and some were caused by bombing. Air power did play an important part in civilian casualties," Karzai said.