KABUL - Afghan President Hamid Karzai reached out to the Taliban on Friday, part of a call for reconciliation that the palace says will be the main focus of his second term that began last week.

Speaking to reporters outside his palace in Kabul on the first day of the Muslim Eid Al-Adha holiday, Karzai said:

I once again call upon our brothers, the Taliban, Hezb-e-Islami and everyone who is away from their land and who have taken up arms against their soil, to come back to their country for peace, stability, prosperity, he said.

So that we Afghan people join hand in hand together to rebuild and prosper our beloved country. Hezb-e-Islami refers to followers of former anti-Soviet guerrilla commander Gulbuddin Hekmatyar, an Islamist who has been sympathetic to Taliban aims.

Karzai, sworn in last week for his second five-year term, called for reconciliation with the militants in his inauguration speech and his office has said the insurgents could be asked to attend a loya jirga, or grand council meeting, next year.

In a rare public statement on Wednesday, the Taliban's reclusive leader, Mullah Omar, rejected Kabul's calls for negotiations and called on Afghans to break off ties with their stooge government.

The Taliban, who have intensified their insurgency to its strongest levels since being toppled by U.S.-backed forces in 2001, have repeatedly said they will not hold talks with the government as long as there are foreign troops in Afghanistan.

U.S. President Barack Obama is expected to announce next week a strategy that involves sending tens of thousands more troops to fight the growing insurgency. There are now about 110,000 foreign troops in Afghanistan, two-thirds of them American.

U.S. officials have backed Afghan efforts to reach out to the militants, including attempts to make contact with Saudi Arabia acting as a go-between.

I will not abandon this struggle. I hope that Mullah (Omar) and other Taliban realize this act is a national necessity for peace and security, he said.

Karzai, whose reputation has been severely damaged after a fraud-marred election in August, called on his rivals, including former presidential candidate Abdullah Abdullah to join the new government. He is expected to announce a cabinet line-up in coming weeks.

(Writing by Yara Bayoumy; Editing by Sanjeev Miglani)

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