Terrorism has been largely eliminated in Afghanistan, interim Prime Minister Hamid Karzai said in an interview Wednesday. 

Despite Karzai's optimism, American officials said U.S. and British forces were intensifying the search for Usama bin Laden and Al Qaeda members across Afghanistan. 

"Some [Al Qaeda members] may be still here, but I don't think they are in large numbers," Karzai told The Associated Press. "I think that terrorism is largely defeated in Afghanistan." 

"There are remnants in the form of individuals or small groups. Those should be looked for and arrested and put to trial," Karzai said. 

"With regards to Usama bin Laden, I don't know where he is," Karzai said. "We receive reports now and then that he may be here or there, and if we get a detailed report about his whereabouts, we will certainly go after him and arrest him." 

A report in a Pakistani newspaper quoted an unnamed former Taliban leader as saying bin Laden had died of a chronic lung infection about two weeks ago and had been buried in an unmarked grave. U.S. and Afghan officials had no comment on the convenient demise. 

Kenton Keith, spokesman for the U.S.-led coalition, said Wednesday that military action would continue as pockets of resistance remain, mostly in eastern Afghanistan. 

"The job isn't finished," Keith said at a news conference in Islamabad, Pakistan. 

About 500 Marines were placed on high alert and were expected to join the cave-to-cave search of the area currently being conducted by U.S. and British special forces and their local Pashtun tribal allies. Pashtun commanders say they have searched most of the caves since gaining control of the complex last week. 

The primary focus, he said, was Taliban leaders and senior Al Qaeda members. 

"Some of these individuals have been accounted for, but others are either in hiding, on the run or holed up in one of the remaining pockets of resistance," Keith said. "Interrogation of captives and the investigation of former hiding places will bring some clarification over the coming days." 

Karzai affirmed a need for U.S.-led coalition troops in Afghanistan and air strikes on suspected mountain hide-outs. 

"They need to fight terrorism right now physically inside Afghanistan," he said, "to bring them out of their hide-outs and to deliver them to justice, to international justice and to Afghan justice." 

Karzai added that he believed Taliban leader Mullah Mohammed Omar was still in Afghanistan, having received regular reports from southwest Afghanistan that Omar was in the area. He has asked his loyalists to fan out across that area to hunt him down and arrest Omar. 

"We will look for him, and if we find where he is, we will definitely arrest him," said Karzai. 

Karzai met with the coalition cabinet for the second time Wednesday, as the defense and interior ministers and the security chief reported on the security situation in Kabul and elsewhere. 

Other ministers spent the weekend assessing the condition of the country. 

"We are beginning from nothing, from less than nothing," Education Minister Rassool Amin said while visiting his dilapidated ministry. 

Armed militiamen were still wandering the streets Wednesday morning, despite a requirement, agreed upon in Bonn, Germany, that all soldiers leave Kabul after the arrival of international peacekeepers. A British contingent landed last week. 

Karzai said one of his priorities is to create a national army for Afghanistan to replace the numerous armed militias which control many areas. 

One hesitant step toward that goal was Karzai's appointment Monday of the powerful ethnic Uzbek warlord Abdul Rashid Dostum as deputy defense minister, one of the new administration's most important compromises to date. 

Dostum, whose private army captured and still controls the key northern city of Mazar-e-Sharif, had been upset because the key ministries of defense, foreign affairs and the interior were awarded to ethnic Tajiks from the Panjshir valley. 

Karzai, a member of Afghanistan's largest ethnic group, the Pashtuns, called Dostum's appointment "the first step toward a national army." 

The Soviet-trained Dostum, who fought alongside the Russians during the 1980s and switched sides only as the communist regime fell in 1992, is renowned for his ruthlessness and unpredictability. 

During the chaotic 1992-96 rule of the various factions that eventually united against the Taliban to form the Northern Alliance, Dostum fired rockets at his sometime allies in Kabul and even bombed the city with fighter jets left by the Soviets after they withdrew from Afghanistan in 1989. 

Later, Dostum gained notoriety for executing one of his own soldiers by strapping the man to the treads of a tank, which then drove around a large courtyard. 

In other developments: 

• Pakistan said Wednesday it had arrested 43 Afghans with suspected ties to bin Laden and Omar near the port city of Karachi. They were seized by the coast guard and are being interrogated, said Maj. Mohammad Akram. 

• Pashtun forces in charge of Kandahar were still trying to control several Arab Al Qaeda fighters who have holed themselves up in a hospital prison ward, threatening to detonate grenades if anyone tried to arrest them. The Arabs were brought to the hospital by their Taliban allies before the city fell earlier this month. 

• Anti-Taliban forces on Sunday arrested Awal Gul, an Afghan commander who was instrumental in convincing Taliban commanders to surrender the area around Jalalabad, for alleged ties to Al Qaeda, the Pakistan-based Afghan Islamic Press reported. It was unclear whether Gul was given to U.S. forces. 

• Turkish Prime Minister Bulent Ecevit, whose country has close historic ties to Afghanistan, especially with the Uzbek and Turkmen minorities, said in a letter sent Tuesday to Karzai that his nation was ready to give every kind of help toward building national army and police forces in Afghanistan. 

• An unnamed Western diplomat said the United States has asked Yemen to allow U.S. Marines to take part in what has been a deadly hunt for Al Qaeda members. The source said the United States also wants to set up a joint task force in Yemen that would include officials from the CIA and other agencies. The U.S. Embassy in Yemen was closed Tuesday for Christmas, and a Pentagon duty officer did not immediately return calls seeking comment. 

• More than 500 female refugees, including former judges, doctors and government officials, gathered in Peshawar, Pakistan, to discuss their roles in the new Afghanistan. They approved resolutions to be presented to Karzai, including calls for equal rights, full participation in drafting a constitution and the rights to education and land ownership. 

The Associated Press contributed to this report.