KABUL - Afghan President Hamid Karzai used a keynote anti-corruption speech on Tuesday to defend the most senior of his officials to be convicted of graft in years, a move that could anger Western backers who demand more accountability.

The president opened a three-day anti-corruption conference, which had been billed by diplomats as a sign that Karzai took seriously the West's concern over an issue seen as key to winning popular support against a resurgent Taliban.

Shortly before he spoke, a suicide bomber blew himself up in the capital's Wazir Akbar Khan diplomatic residential district, killing seven people and wounding 44. The blast, underscoring the country's deteriorating security, took place outside the home of a former vice president, who was unhurt.

Karzai spoke at length about the bribes ordinary Afghans are forced to pay, and rebuked officials who after one or two years work for the government, get rich and buy houses in Dubai.

However, he also cast doubt on the biggest anti-corruption conviction his prosecutors have achieved in years.

Kabul Mayor Abdul Ahad Sayebi, a Karzai appointee who was sentenced to four years prison last week for corruption and is now free on bail pending an appeal, attended the conference seated towards the front. Karzai pointed him out.

One very serious caution I want to say. The mayor of Kabul has been sentenced to four years jail. I know the mayor. He is a clean person. I know him, Karzai said.

He said Sayebi had been targeted by enemies for refusing to grant them government land, and gestured to his chief justice and attorney general demanding they look into the case, although he also said Sayebi should still go to jail if guilty.

Karzai's standing among the countries which have deployed nearly 110,000 troops to defend his government has plunged since he was re-elected in an August 20 vote, in which a U.N. backed probe found nearly a third of his votes were fake.
His actions against corruption are being closely watched in the West, where leaders of NATO countries are defending an increasingly unpopular war against domestic public opinion that questions whether Karzai's government is worth protecting.

U.S. President Barack Obama announced this month he was sending an extra 30,000 troops to Afghanistan, the first of whom will start arriving within days. London said the first of 500 British reinforcements arrived on Tuesday.

In his speech, Karzai cautioned against an unrestrained effort to root out graft, which itself could be corrupt.

As we fight corruption, we must be very careful, extremely careful, that the fight against corruption does not become corrupt itself, Karzai said.

Every one of our police, every one of our soldiers, every one of our mayors, every one of our judges, every one of our governors can go to someone's house knock on the door and drag a man out of that house and terrorise him. In my opinion, this is the main form of corruption, Karzai said.

Diplomats have pointed to the conference as a chance to show how Karzai will clean up his government. A U.S. embassy spokeswoman declined to comment immediately on Karzai's speech or his remarks about the mayor.

EX-VICE PRESIDENT SURVIVES BLAST

Karzai's top anti-corruption advisor, Mohammad Yasin Usmani, said corruption was rife throughout the country, but was worst in contracts from foreign governments, a point Karzai has made in the past in suggesting the West bore a share of the blame.

U.S. Defence Secretary Robert Gates acknowledged last week that poor Western oversight of contracts was part of the problem.
Shortly before Karzai addressed the conference, a suicide car bomber blew up his vehicle outside the house of former vice president Ahmad Zia Massoud, opposite a hotel used by foreigners. Two of Massoud's bodyguards were among the dead.

A separate blast in Gardez, capital of Paktia province in the restive southeast of the country, killed four Afghans and one Nepali citizen at the offices of a contractor working on U.S. government-funded aid projects, Development Alternatives Inc.

Worsening instability has penetrated the comparatively secure capital in recent months. Hundreds of U.N. staff were evacuated after an attack six weeks ago.

Karzai is expected to name his new cabinet by the end of this week. In an inauguration speech widely praised by Western officials last month, he promised to appoint ministers that are honest and capable and to end the culture of impunity.

Western diplomats are cautiously hopeful they will see ministers they trust take charge of the main portfolios that spend their aid money. However, they also expect Karzai to include political allies of former warlords in his 26-member team, as payback for their support in the election.

(Additional reporting by Abdul Saboor, Ahmad Masood and Peter Graff; Writing by Peter Graff)

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