Afghan territory should not be used in a proxy war between the United States and Iran, President Hamid Karzai said Wednesday after the Islamic republic captured a US drone.

Karzai was speaking in Kabul after an hour-long meeting with US Defense Secretary Leon Panetta, who nevertheless said the US would continue to pursue "important intelligence operations".

The bat-winged RQ-170 Sentinel, a stealth drone designed to evade radar for surveillance flights, was launched from Afghanistan on a CIA spying mission when it went missing, US officials have said.

"Afghanistan should maintain and has maintained a very friendly relationship with Iran so we don't want to be involved in any adversarial relation between Iran and the US," Karzai said.

"Afghanistan wishes that its sovereignty and territorial integrity is not used one against the other."

But Panetta said such intelligence operations would continue.

"Those are operations that I will not discuss publicly, other than to say that part of our efforts to defend this country and to defend our country involves important intelligence operations which will continue to pursue," he said.

Afghanistan has long been used as a pawn in battles between other nations, including the US and the Soviet Union during the Cold War, and suicide attacks on Shiites on December 6 which killed at least 84 people threatened to open up another divide.

The drone episode has handed Iran a propaganda coup and Iranian state television has shown images of a robotic aircraft that experts say resembles the Sentinel.

Kabul is negotiating a strategic partnership deal with Washington which will define the terms of the US military presence in Afghanistan after the withdrawal of combat troops in 2014.

And Karzai has said a condition of the deal will be that the US does not use its territory against its enemies in the region.

But Iran has voiced its objections to the continued presence of international forces in Afghanistan after NATO combat troops pull out in 2014.

Panetta is in Afghanistan to review the war effort with the United States, which is on track to recall 33,000 troops by the end of the next year and is shifting its focus to an advisory role in training Afghan security forces.

He said the discussions with Karzai included how to work with Pakistan to increase security in Afghanistan and repeated his belief that 2011 has represented a "very important turning point" in Afghanistan.

"As always, we have not won until we have completed the mission, but I do believe we're in the process of making significant progress here," he said.

Earlier Panetta told US troops based in the eastern province of Paktika near the Pakistan border they were winning the 10-year war.

"We're moving in the right direction and we're winning this very tough conflict," he said.

Panetta said it was important to make sure Pakistan could secure its side of the border so that Haqqani militants were not allowed safe havens.

"Bottom line is that it is complicated, it is complex, we have some difficult issues to deal with but at the same time it's important to maintain a relationship with Pakistan because we are confronting a common enemy."

America's alliance with Pakistan is in crisis over NATO strikes that killed 24 Pakistani soldiers near the Afghan border on November 26.

Islamabad has shut the US supply line into landlocked Afghanistan and forced Americans to leave a base widely reported to have been a hub for CIA drones.

As the United States draws the curtain on its eight-year venture in Iraq, Washington is determined to bring an end to the Afghan war as soon as possible.

The United States is withdrawing 10,000 troops this year, leaving 91,000 on the ground into 2012. Another 23,000 are to leave by the end of September 2012.

That will mark the end of the "surge" ordered by President Barack Obama in late 2009 in a bid to reverse the Taliban insurgency, defeat Al-Qaeda and speed up an end to the war, and will leave 68,000 US forces on the ground.

Karzai recently announced a second phase of transition which will see Afghans take charge of six provinces, seven provincial capitals and more than 40 districts, including three in the southern province of Helmand, one of the most deadly in the conflict.

Despite the tight timetable, the military and the United Nations disagree over the extent to which violence is really falling in Afghanistan.

The world body said the number of civilians who were killed increased by 15 percent in the first six months of this year.

Karzai said overall stability had improved. But, speaking of ongoing attacks, he added: "What we have not fully done yet is to provide individual security to the Afghan people."