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* Protocol spat snarls revived peace bid
* Exchange of captives expected to be discussed
By Amena Bakr
DOHA, June 20 (Reuters) - A fresh effort to end Afghanistan's 12-year-old war looked in trouble on Thursday after a diplomatic spat about the Taliban's new Qatar office delayed preliminary discussions between the United States and the Islamist insurgents.
A meeting between U.S. officials and representatives of the Taliban had been set for Thursday in Qatar but Afghan government anger at the fanfare surrounding the opening of a Taliban office in the Gulf state threw preparations into confusion.
The squabble may set the tone for what could be arduous negotiations to end a conflict that has torn at Afghanistan's stability since the U.S. invasion following the Sept. 11, 2001 al Qaeda attacks on U.S. targets.
Asked when the talks would now take place, the source in Doha said "There is nothing scheduled that I am aware of", and confirmed that meant they would not happen on Thursday.
The opening of the office was a practical step paving the way for peace talks. But the official-looking protocol surrounding the event raised angry protests in Kabul that the office would develop into a Taliban government-in-exile: A diplomatic scramble ensued to allay their concerns.
U.S. Secretary of State John Kerry spoke with Afghan President Hamid Karzai on Tuesday night and again on Wednesday morning in an effort to defuse the controversy, U.S. and Afghan officials said.
NATO chief Anders Fogh Rasmussen appeared to side with Karzai by pointing out that alliance leaders at NATO's Chicago summit last year had made clear that the peace process in Afghanistan must be "Afghan-led and Afghan-owned".
"Reconciliation is never an easy process in any part of the world," Rasmussen told reporters after talks at NATO headquarters in Brussels with Bulgarian Prime Minister Plamen Oresharski.
Nevertheless, Rasmussen said peace talks could reinforce security gains in Afghanistan and contribute to long-term security and unity. "So I hope such talks will start sooner rather than later," he said.
A Taliban flag that had been hoisted at the Taliban office in Qatar on Tuesday had been taken down and lay on the ground on Thursday, although it appeared still attached to a flagpole.
A name plate, inscribed "Political Office of the Islamic Emirate of Afghanistan" had been removed from the outside of the building. But a similar plaque fixed onto a wall inside the building was still there on Thursday morning, witnesses said.
Asked whether the Taliban office had created any optimism about peace efforts, the source replied: "Optimism and pessimism are irrelevant. The most important thing is that we now know the Taliban are ready to talk, and sometimes talk is expensive."
Word of the U.S.-Taliban talks had raised hopes that Karzai's government and the Taliban might enter their first-ever direct negotiations on Afghanistan's future, with Washington acting as a broker and Pakistan as a major outside player.
Waging an insurgency to overthrow Karzai's government and oust foreign troops, the Taliban has until now refused talks with Kabul, calling Karzai and his government puppets of the West. But a senior Afghan official said earlier the Taliban was now willing to consider talks with the government.
Pakistan's powerful military played a central role in convincing the Taliban to hold talks with Washington, U.S. and Pakistani officials said, a shift from widely held U.S. views that it was obstructing peace in the region.
A prisoner swap is seen as likely to happen as the first confidence-building measure between the two sides, said one Pakistani official, who declined to be named.
But he said there were many likely spoilers in the peace process who would want to maintain the status quo to continue to benefit from the war economy and the present chaotic conditions.
"The opening of a Taliban office and the American readiness to hold talks with the Taliban is a forward movement. What happens next depends on the quality of dialogue and political will of the interlocutors," he said.
Pakistan has been particularly critical of Karzai, seeing him as an obstacle to a peace settlement.
In its talks with the U.S. officials, the Taliban was expected to seek the return of former commanders now held at the Guantanamo Bay military prison in Cuba, a move opposed by many in the U.S. Congress, as well as the departure of all foreign troops.
The United States wants the return of the only known U.S. prisoner of war from the conflict, Sergeant Bowe Bergdahl, who is believed to be held by the Taliban.
The protocol dispute burst into the open on Wednesday when Karzai said his government would not join U.S. talks with the Taliban and would halt negotiations with Washington on a post-2014 troop pact.
Officials from Karzai's government, angered by the official-sounding name the Taliban chose for its political office in Doha, said the United States had violated assurances it would not give official status to the insurgents.
"As long as the peace process is not Afghan-led, the High Peace Council will not participate in the talks in Qatar," Karzai said in a statement, referring to a body he set up in 2010 to seek a negotiated peace with the Taliban.
A statement on Qatar's foreign ministry website late on Wednesday clarified that the office which opened was called the "Political Bureau for Afghan Taliban in Doha".
The source familiar with the matter said: "The Taliban have to understand that this office isn't an embassy and they are not representing a country."
The dispute over the Taliban office after months of behind-the-scenes diplomacy to restart the peace talks underscored the tensions between Karzai and the Taliban.
Fighting continued in the war-damaged nation. Four U.S. soldiers were killed in a rocket attack on the heavily fortified Bagram base near Kabul late on Tuesday.
Underlining the importance of the peace process to Washington, the State Department said Kerry would travel to Doha for meetings with senior Qatari officials on Friday and Saturday. But U.S. officials said he would not meet with Taliban representatives.