President George W Bush's administration has launched an urgent review of US policy in Afghanistan as US intelligence officials warn of a "downward spiral" in conditions there, US newspapers reported yesterday.

Coalition forces had killed 27 militants in clashes while local villagers had reported 10 civilians were killed in rebel gunfire nearby.

The papers cite officials familiar with a draft National Intelligence Estimate on Afghanistan, a comprehensive and classified report combining analyses of 16 US intelligence agencies that is due for completion after US elections in November.

The report concludes that Afghanistan is in a "downward spiral" and casts doubt on the ability of its government to stem the resurgence ofTaliban influence there, the New York Times said.

"The classified report finds that the breakdown in central authority in Afghanistan has been accelerated by rampant corruption within the government of President Hamid Karzai and by an increase in violence by militants who have launched increasingly sophisticated attacks from havens in Pakistan," the Times said.

It also describes the impact of a heroin trade "which by some estimates account for 50 percent of Afghanistan's economy," the Times

According to The Washington Post, "analysts have concluded that reconstituted elements of al-Qaeda and the resurgent Taliban are collaborating with an expanding network of militant groups, making the counterinsurgency war infinitely more complicated."

"As the US presidential election approaches, senior officials have expressed worry that the situation in Afghanistan and Pakistan is so tenuous that it may fall apart while a new set of US policymakers settles in." when a new administration takes over in January, the Post said.

Earlier at least 27 Islamic militants were killed in military opera-tions across insurgency-hit Afghanistan, authorities said

Thursday, while villagers reported that 10 civilians died in rebel gunfire.

The bloodshed in clashes on Wednesday underscored a deterioration in security this year that has led to new emphasis on a political solution to a Taliban-led insurgency launched after the extremist regime was toppled in 2001.

The claim of the heavy civilian death toll in Uruzgan province on Wednesday could not be independently verified because of the remoteness of the area.

Afghan and international troops were on patrol when they were attacked with guns, mortars and rocket-propelled grenades (RPG), a statement from the US Forces in Afghanistan said.