Nov. 20 (Bloomberg) -- Secretary of State Hillary Clinton said she is encouraged by Afghan President Hamid Karzai’s promises to fight corruption and build up Afghan security forces to replace U.S. troops by the end of his new five-year term.

Karzai’s inaugural speech yesterday “was a visionary outline of what he’d like to see happen by the time he finishes his second term,” Clinton said in an interview before she left Kabul after a two-day visit.

As the most senior U.S. official to go to Afghanistan since the Aug. 20 election was marred by widespread fraud, Clinton used her trip to signal the Obama administration’s desire for a fresh start in a partnership that had become contentious.

President Barack Obama’s decision on whether to boost U.S. military forces in Afghanistan beyond 68,000 troops has been complicated by worries that Karzai is too weak to sweep away graft and support an expanded effort to quell the insurgency in his country.

Karzai’s speech, delivered before 800 guests including Clinton and Pakistani President Asif Ali Zardari in the front row, attempted to answer points of discord with international partners who are pressing Karzai to appoint officials on merit, not political alliances.

Clinton has said further civilian aid to Afghanistan will hinge on measurable results in preventing and prosecuting government graft. Analysts have suggested the U.S. may likewise stagger the deployment of additional troops contingent on Karzai’s cutting ties with warlords and extending government control to insurgent-plagued communities.

Under Consideration

“It’s one of the many factors that we’ve been examining and that the president has been testing as an assumption about how we can be effective,” Clinton said in the interview.

While saying she wouldn’t speak for Obama “or preempt him from making the announcement,” on troop strength, Clinton said that the chances of success in destroying the al-Qaeda terror network sheltered under Taliban rule depend on “having good partners” in the Afghan government.

Clinton is emerging as the Obama administration’s main conduit to Karzai.

Unlike then Vice President-elect Joe Biden, who stormed out of a dinner with Karzai late last year, and special envoy Richard Holbrooke, who clashed with Karzai over election fraud, Clinton has avoided a strained relationship. She wields more influence over Karzai by accentuating the positive and politely expressing U.S. concerns, two administration officials said.

Afghan View

An Afghan official, who spoke on condition of anonymity because of the sensitivity of the issue, said his government considers Clinton’s understanding of Afghanistan more nuanced than anyone in the Obama administration, and hopes she would take the leading role in shaping policy.

In the interview, Clinton credited Karzai with progress in education, health and economic development and praised plans to stem bribery and prosecute corruption. Clinton said that during her private, 90-minute meeting with Karzai, she listened to his concerns about the U.S. in Afghanistan as much as she shared her views.

“We need to do more on our side” to ensure that international aid is channeled effectively to high-performing government ministries and not wasted on overpriced contractors, she said.

For his part, Karzai used his speech to address points of friction with the U.S. and NATO allies. He pledged to pursue peace with militants, fight corruption and drugs and expand a national army and police capable of taking over security operations in five years. That would allow the U.S. to exit a war going into its ninth year.

Security Pledge

With “continued international support,” Afghanistan will take “the lead in ensuring security and stability,” according to a palace translation of remarks he delivered in Dari and Pashtu, the two national languages.

In Washington, U.S. Defense Secretary Robert Gates said he favors handing responsibility for security in Afghanistan to that nation’s forces only when they are ready to handle it and possibly in phases, as is being done in Iraq.

Gates said Afghan forces could take responsibility gradually -- “on a province-by-province or even district-by- district level,” as in Iraq -- and that “could come relatively soon.”

In his inaugural address, Karzai demanded that security contractors be phased out. Within two years, the widespread use of private security companies must cease, and their duties delegated to Afghan security forces, he said.

Reconciliation Effort

“Security and peace cannot be achieved through fighting and violence,” and reconciliation with insurgents will top his agenda, Karzai, 51, said in a ceremonial hall under eight chandeliers, after taking the oath of office and kissing the Koran.

His government will welcome any disenchanted “compatriots who are not directly linked to international terrorism” to return home from the battlefront and live in peace, a reference to the Taliban and other insurgent networks.

Karzai extended an olive branch to electoral rivals Abdullah Abdullah, a former foreign minister, and Ashraf Ghani, a former finance minister, inviting both to join rebuilding efforts.

Abdullah, who pulled out of a planned Nov. 7 runoff election, saying a fair vote was impossible after monitors concluded that a fourth of the ballots in the first round had been faked, didn’t attend the ceremony.

To contact the reporter on this story: Indira Lakshmanan in Kabul at ilakshmanan@bloomberg.net

Last Updated: November 19, 2009 20:03 EST