Obama: We need an exit strategy for Afghanistan

Military force alone will not end the war in Afghanistan, Barack Obama said today as he suggested a US "exit strategy" could be part of a new policy.

Speaking on CBS's 60 Minutes programme, the US president outlined his administration's review of Afghanistan and Pakistan strategy, which is based on recommendations from US commanders and consultations with allies.

The US and its European allies are believed to be preparing to install a high-profile figure in the heart of the Afghan government in a direct challenge to the authority of president Hamid Karzai.

The new post of chief executive or prime minister would see a further weakening of Mr Karzai's position, and shows a desire by the US to challenge what is seen as incompetence and corruption in his administration.

The president made clear his new approach would call for a greater emphasis on economic development in Afghanistan, diplomacy with neighbouring Pakistan and better co-ordination with international partners than employed by his predecessor, George Bush.

Describing Afghanistan as "a tough nut to crack, Mr Obama said: "What we can't do is think that just a military approach in Afghanistan is going to be able to solve our problems. So what we're looking for is a comprehensive strategy. And there's got to be an exit strategy. There's got to be a sense that this is not perpetual drift."

Mr Obama hopes to shift the US focus from the unpopular war in Iraq to the conflict in Afghanistan, where violence is now at its highest level since coalition forces invaded in 2001. He is preparing to make his first major trip abroad since taking office on 20 January, when he will meet Nato leaders at a two-day summit on 3 April in Strasbourg. Afghanistan troop levels will be high on the agenda.

The president was today also announcing a programme aimed at helping struggling banks clean up their books by buying as much as $1 trillion in "toxic loans".

The latest step in the bank rescue strategy by Mr Obama's administration is aimed at getting them to start lending again. Tomorrow he will release his plans to overhaul the US financial system in an attempt to avoid a repetition of the current economic crisis.

A key part of his programme will be to give the government authority to take over troubled banks that threaten the financial system.

The purchasing of the toxic assets will use money from the $500billion bail-out fund, the US Federal Reserve and the Federal Deposit Insurance Corp.