Karzai seeks closer trade ties with Muslim nations

ISTANBUL (Reuters) - Afghan President Hamid Karzai, re-elected a week ago after a flawed vote, appealed on Monday for closer trade ties with fellow Muslim countries to help Afghanistan break its cycle of conflict.

Karzai met representatives of eight governments, including Turkish President Abdullah Gul and Iranian President Mahmoud Ahmadinejad, on the sidelines of an economic summit held by the Organisation of the Islamic Conference in Istanbul.

"It is high time that Afghanistan begins to live a life of peace and prosperity," he told a breakfast meeting before the formal opening of the summit.

"Afghanistan's interest is primarily in having close brotherly relations with its neighbours, freedom of trade and transit, and an effective environment of cooperation."

Most trade with landlocked Afghanistan passes through the conflict-ridden border with Pakistan and through Iran.

The widespread fraud reported during the election and his chief rival's refusal to contest a run-off have damaged Karzai's credibility at the start of his second term.

Karzai was seen as a guarantor of Western aid when he was first elected in 2004 but his relations with the United States and other Western allies have become strained by allegations of corruption and misgovernment.

His popularity dwindled at home as ordinary Afghans increasingly believed they had failed to benefit from billions of dollars in aid and a growing Taliban insurgency contributed to their sense of insecurity.

Civilian casualties caused by Western forces backing Karzai's government added to their resentment.