KABUL, Afghanistan (AP) -- The American campaign in Afghanistan suffered a double blow Thursday: The Taliban broke off talks with the U.S., and President Hamid Karzai demanded NATO troops immediately pull out of rural areas in the wake of the killing of 16 civilians.

The setbacks effectively paralyze the two main tracks for ending the 10-year-old war. Part of that exit strategy is to transfer authority gradually to Afghan forces. Another tack is to pull the Taliban into political discussions with the Afghan government, though it's unclear that there has been any progress since January.

Although Karzai has previously said that he wanted international troops to transition out of rural areas, the call for an immediate exit is new. Karzai is known for making dramatic demands then backing off under U.S. pressure.

Even if the U.S. refuses to comply or Karzai eventually changes his tone, the call for a pullback will likely become another issue of contention between the Afghans and their international allies at a time of growing war weariness in the United States and other countries of the international coalition.

Karzai spoke as Afghan lawmakers were expressing outrage that the U.S. flew the soldier suspected in the 16 civilian killings to Kuwait on Wednesday night when they were demanding he be tried in the country.

"Afghan security forces have the ability to keep the security in rural areas and in villages on their own," Karzai said in a statement after meeting visiting U.S. Defense Secretary Leon Panetta. He said he had conveyed his demand to Panetta.

Foreign Ministry spokesman Janan Mosazai confirmed that Karzai was asking for NATO to immediately pull back from villages and rural areas to main bases.

Karzai is confident that Afghan security forces are ready to take over and know "a thousand times better than any foreign troops the culturally sensitive ways of dealing with their own people," Mosazai said.

If the NATO troops do pull back, it would leave vast areas of the country unprotected and essentially mean the end of the strategy of trying to win hearts and minds by working with and protecting the local populations.

The American accused of killing 16 civilians on Sunday was stationed on just such a base, where a small group of soldiers worked with villagers to try to set up local defense forces and strengthen government.

Withdrawing from rural areas would also mean pulling back U.S. forces from the border areas with Pakistan.

The accused soldier, who has not been named, is suspected of going on a shooting rampage in villages near his base in southern Afghanistan, killing nine children and seven other civilians and then burning some of their bodies.

Karzai told Panetta that everything must be done to prevent any such incidents in the future, including speeding up timelines for NATO pullbacks.

Karzai also said he now wants Afghan forces take the lead for countrywide security in 2013 in what appeared to be a move to push the U.S. toward an earlier drawdown.

He spoke a day after President Barack Obama and British Prime Minister David Cameron said in Washington that they and their NATO allies were committed to shifting to a support role in Afghanistan in 2013 - a year earlier than scheduled. But it appeared that Karzai was requesting the change take place at the beginning of - rather than over the course of - 2013.

Obama gave his fullest endorsement yet for the mission shift, but he said the overall plan to gradually withdraw forces and hand over security in Afghanistan will stand.

In January, after French President Nicolas Sarkozy suggested that foreign forces speed up their timetable for handing combat operations to Afghan forces in 2013, Karzai said he would favor that - if it were achievable.

The Taliban said it was suspending talks with the U.S. because the Americans failed to follow through on its promises, made new demands and falsely claimed the militant group had entered into multilateral negotiations.

Taliban spokesman Zabiullah Mujahid said in a statement that they had agreed to discuss two issues with the Americans: the establishment of the militant group's political office in Qatar and a prisoner exchange. The Taliban said the Americans initially agreed to take practical steps on these issues, but then "turned their backs on their promises" and came up with new conditions for the talks.

"So the Islamic Emirate has decided to suspend all talks with Americans taking place in Qatar from today onwards until the Americans clarify their stance on the issues concerned and until they show willingness in carrying out their promises instead of wasting time," Mujahid said. The Taliban refers to itself as the Islamic Emirate of Afghanistan.

"We must categorically state that the real source of obstacle in talks was the shaky, erratic and vague standpoint of the Americans, therefore all the responsibility for the halt also falls on their shoulders," he said.

The Taliban also said Karzai falsely claimed the Afghan government was involved in three-way peace talks with the militants and the U.S. The Taliban said talking with the Afghan government was "pointless."

Panetta applauded Karzai last month for telling an interviewer that the U.S., Afghan government and the Taliban recently held three-way talks aimed at moving toward a political settlement of the war.

The Taliban denied the claim at the time.

Afghan officials told The Associated Press that the U.S. had agreed in January to include representatives of the Karzai government in future meetings, but U.S. officials would not confirm that. U.S. officials did say that if this initial trust-building phase of contacts with the Taliban blossoms into full peace negotiations, the U.S. would sit alongside the Taliban and the Afghan government.

The secretary of the Afghan peace council, which has been pushing for talks between the Afghan government and the Taliban, said it was not clear why the Taliban stopped negotiations with the United States.

Mohammad Ismail Qasimyar speculated that it could be related to the Taliban's request that five top Taliban leaders be released from the U.S. military prison at Guantanamo Bay, Cuba.

He said Afghan government needs to be involved in the negotiations.

"In the past, we did a lot of preliminary work to build trust and goodwill for talks," he said, adding that if the Afghans are not involved, any peace process won't work.

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Associated Press writers Deb Riechmann, Heidi Vogt and Lolita C. Baldor in Kabul, Mirwais Khan in Kandahar, Kathy Gannon in Islamabad and Adam Schreck in Kuwait City, Kuwait, contributed to this report.

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