UK downplays progress on Afghan-Taliban peace talks

LONDON (Reuters) - Britain's foreign minister said Wednesday there was a long way to go before a political settlement could be reached to end the Afghan conflict, amid reports of talks between the Afghan government and the Taliban.

Official sources say that all main parties in the Afghan conflict are now considering ways to reach a deal. But the sources, including NATO, Afghan and non-American officials, have described the "talks about talks" as preliminary and fragile.

"We are not remotely at the stage of laying down the terms of a political settlement," Foreign Secretary William Hague told parliament, in the first of a series of quarterly government reports on the progress of the war in Afghanistan.

"There is no political settlement currently being discussed around a table by the Afghan government and the leaders of the Taliban, that is not the stage that we are at."

The Taliban themselves dismiss talks as propaganda.

Hague also said levels of violence in Afghanistan were expected to remain high and even rise as Afghan and foreign forces tackled the Taliban.

The insurgency is gaining in strength and spreading to previously peaceful parts of Afghanistan, despite the presence of nearly 150,000 foreign troops, and this year has been the bloodiest since the ousting of the Taliban in 2001.

Hague also drew attention to a corruption scandal at Afghanistan's top private financial institution last month to call for more to be done to tackle graft, while other lawmakers pointed to Iran's payments to Afghan President Hamid Karzai.

Karzai said this week his office receives bags of cash from Iran, but said it is a transparent form of aid that helps cover expenses at the presidential palace, and that the United States makes similar payments.

"Progress on corruption, although some has been made, it is by no means good enough, and we want to see a lot more progress made in tackling corruption," Hague said.

"It is true that a number of countries provide funding to the Afghan government in certain forms.

"It's important that this is transparent, that it is used for legitimate government functions and that it is not the basis for interference in the internal affairs of Afghanistan," he said, answering a question about Iran's payments.

Britain has some 9,500 troops in Afghanistan as part of the NATO-led, U.S.-dominated, mission to quell the Taliban insurgency and strengthen the Afghan security forces. Britain aims to withdraw by 2015.

(Reporting by Mohammed Abbas: Editing by Myra MacDonald)