UNITED NATIONS (Reuters) - Opposition fears of an unfair election in Afghanistan this year are well-founded, and a rigged poll would fuel political instability and undermine support for democracy, a top U.N. envoy has warned.

The warning came as Afghan President Hamid Karzai said he welcomed a U.S. deployment of 17,000 extra troops to Afghanistan but that efforts to stabilize the country were seven years too late.

Afghanistan is suffering its worst violence since U.S.-led forces toppled the Taliban in 2001, with the Islamist insurgency steadily increasing and spreading from the south and east.

Presidential elections are due on August 20, with Karzai expected to be among the candidates. A vote that lacks legitimacy would be further grist for Taliban efforts to undermine popular support for the government and its Western allies.

All involved -- the government, the opposition, and the international community -- must understand the costs of a flawed and unfair election process, Kai Eide, the U.N. special envoy to Afghanistan, told the U.N. Security Council on Thursday.

The result (of a rigged poll) would be prolonged political instability when stability is more than ever required (and) would create doubt in the minds of many Afghans about the value of democratic processes when confidence is needed, he said, urging the Kabul government to address opposition concerns on the issue.

Eide did see some improvement: a push to reform the police and cut corruption. He also said heroin production was expected to fall this year in Afghanistan, the world's top producer.

In fresh violence in Afghanistan, 30 militants were killed by Afghan and U.S.-led forces in Helmand province on Thursday, the U.S. military said. The Interior Ministry said Afghan police had killed 17 militants in Helmand a day earlier.

Elsewhere, three militants were killed in Logar province, close to the capital Kabul, the U.S. military said.

DONOR CONFUSION

Eide spoke of confusion over aid to Afghanistan. He said as much as $1 billion has been donated without going through the government, making it hard to monitor how the money was spent.

Afghan authorities do not know, and we do not know, how much is spent ... and for what purpose, he said. However, he told reporters the United Nations' estimate was a reliable one.

Separately, U.N. Secretary-General Ban Ki-moon told Reuters in an interview he wanted Karzai to strengthen relations with neighboring countries, particularly Pakistan.

He said he was encouraged by Karzai's strong cooperative relationship with Pakistan's President Asif Ali Zardari.

U.S. and other military forces in Afghanistan see the elimination of militant support in lawless northwestern Pakistan as essential to winning the war in Afghanistan.

The United States is adding 17,000 troops to the 38,000 it has in Afghanistan, and may send further reinforcements when a policy review by President Barack Obama's administration is finished. Other countries have a total of some 30,000 soldiers aiding the Kabul government under NATO and U.S. command.

In an interview on the U.S. public television news program NewsHour with Jim Lehrer, Karzai said he had been asking for more NATO-led troops to provide security since 2002.

We kept requesting. It didn't happen. I wish these troops have arrived at that time. They're seven years too late, Karzai responded when asked if he welcomed the additional U.S. forces.

Even then, for them to come and provide better security to the Afghan people, protect the borders, prevent the crossing of terrorists into Afghanistan, they're welcome to do that, Karzai added, speaking in his office in Kabul.

PRESSURE ON EUROPE

Europe has been under pressure also to increase its contribution to security forces in Afghanistan, and France proposed on Thursday sending European Union gendarmes to train paramilitary police there.

French Foreign Minister Bernard Kouchner suggested at an EU summit officers be sent from the European Gendarmerie Force set up under a 2004 agreement to specialize in crisis management.

EU governments are keen to make a good start in relations with Obama, who visits Europe early next month, but have been reluctant to alienate voters by pouring in more troops.

The next few weeks are expected to see major developments on Afghanistan. Aside from the likely imminent announcement of the U.S. policy review's findings, an international conference on Afghanistan is set for The Hague on March 31.

Afghanistan's key neighbor to the west, Iran, was invited to the meeting by its old foe the United States and is expected to participate. Iran ... can play a constructive role, said the U.N.'s Ban, who will also be there.

Hard on the heels of that conference, NATO holds a summit where Afghanistan is expected to be a principal topic.

(Additional reporting by Sean Maguire; Writing by Jerry Norton; Editing by Paul Tait)

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