Afghan president says region must tackle terrorism

HERAT, Afghanistan, Oct 20 (Reuters) Afghanistan and its neighbours must launch a regional campaign against terrorism in order to make the most of their natural resources and develop trade, President Hamid Karzai said today.

Karzai was addressing the final session of a conference of the Economic Cooperation Organisation (ECO), a 10-nation group which was founded by Iran, Turkey and Pakistan.

Afghanistan, where a Taliban-led insurgency -- backed by al Qaeda -- has intensified in the past two years, could serve as a bridge bringing ECO nations together, Karzai said.

''Our homelands are resourceful homelands. We have abundant resources and our people are thirsty for progress,'' Karzai said, adding economic development would help bring stability.

''...Terrorism, drugs...and organised crime...form our difficulties and are the main block to regional development.'' He emphasised terrorism was the most serious obstacle.

''And this (development) will not be possible if we do not isolate the handful of terrorists wherever they are and organise ... a joint campaign against them.'' Located on the old Silk Route, Afghanistan has rich copper and iron reserves and some precious stones.

Iran, one of the world's leading oil exporters, Turkey and Pakistan set up the ECO in 1985. Afghanistan, Azerbaijan and the five central Asian nations have since joined.

Turkmenistan has long wanted to export its gas to Pakistan and beyond through Afghanistan, but the multi-billion dollar project has been held up due to insecurity in the country.

Along with Iran, Turkmenistan would help Afghanistan build a rail network that would enable Iran and Turkey to link up with central Asia, an Afghan official said.

During the four-day conference, ECO representatives discussed investment, transit and transport facilitation, energy, trade, exploration as well as export of gas and oil.

Afghanistan is largely a consumer market for the products of its neighbours. Its annual trade with them has grown to some 4 billion dollars since the Taliban's ouster in 2001, according to Afghan government estimates.

The country has not seen any major foreign and local investment since 2001, largely due to poor infrastructure, corruption and the growing insurgency.

The conference, the first such major gathering hosted by Afghanistan for decades, was held in the western city of Herat, which is regarded as one of the safer areas of the country.

REUTERS SZ RAI1820