It follows the endorsement by tribal leaders in June of a plan to engage militants in a reconciliation process.

The Taliban, who were ousted from power in 2001, have been fighting to overthrow the US-backed government and expel foreign troops from Afghanistan.

The formation of the High Peace Council was "a significant step towards peace talks", Mr Karzai's office said.

But previous attempts to negotiate with the Taliban have failed, partly over their insistence that foreign troops leave the country first.

There are nearly 150,000 foreign troops currently deployed in Afghanistan. The US has recently been boosting its presence in the country by sending 30,000 extra troops.

Mr Karzai's office said details of members of the High Peace Council, which could include former insurgents, would be announced after the Eid holiday marking the end of Ramadan next week.

The council is expected to be made up of about 50 people, include members of civil society, women, and figures from the opposition and government.