Rebels resist in Panjshir valley as Taliban set up govt in Kabul

• Fighters led by Ahmad Massoud fight in the Panjshir Valley, over two weeks after the Taliban seize power.
• Each side says it has inflicted heavy casualties.
• Afghanistan battles drought and the ravages of a 20-year conflict.
• The Taliban say the Panjshir valley is surrounded on all four sides.

Over two weeks after the Taliban seized power, fighters loyal to Ahmad Massoud on Thursday fought in the Panjshir Valley, as Taliban leaders in the capital Kabul worked on forming a government.

Panjshir is the last Afghan province resisting rule by the Taliban, whose overthrow of the Western-backed government as United States and other foreign troops withdrew after 20 years has left the country in chaos.

Each side said it had inflicted heavy casualties.

"We started operations after negotiation with the local armed group failed," Taliban spokesman Zabihullah Mujahid said.

Taliban fighters had entered Panjshir and taken control of some territory, he said. "They (the enemy) suffered heavy losses."

A spokesman for the National Resistance Front of Afghanistan (NRFA) rebel grouping said it had full control of all passes and entrances and had driven back efforts to take Shotul district.

"The enemy made multiple attempts to enter Shotul from Jabul-Saraj, and failed each time," he said, referring to a town in neighbouring Parwan province.

Since the Taliban swept into Kabul on August 15, several thousand fighters from local militias and remnants of the government's armed forces have massed in Panjshir under the leadership of Massoud, son of a former Mujahideen commander.

They have been holding out in the steep valley where attacks from outside are difficult.

Efforts to negotiate a settlement appear to have broken down, with each side blaming the other for the failure, as the Taliban prepared to announce a new government.

Mujahid said this was a matter of a few days away while Taliban official Ahmadullah Muttaqi said a ceremony was being prepared at the presidential palace.

Human catastrophe

The legitimacy of the government in the eyes of international donors and investors will be crucial for the economy as the country battles drought and the ravages of a 20-year conflict that killed an estimated 240,000 Afghans.

Humanitarian organisations have warned of impending catastrophe and the economy — reliant for years on many millions of dollars of foreign aid — is close to collapse.

The economy is expected to sink by 9.7% this financial year and 5.2% next year, Fitch said in a report.

Foreign investment would be needed to support a more optimistic outlook, a scenario that assumed "some major economies, namely China and potentially Russia, would accept the Taliban as the legitimate government".

The Taliban enforced a radical form of Islamic law when it ruled from 1996-2001 but has tried to present a more moderate face to the world this time, promising to protect human rights and refrain from reprisals against old enemies.

A source with direct knowledge of the move said Afghan diplomats had been asked to stay in overseas posts for the time being. The Taliban had made clear there would eventually be change but also wanted to maintain a sense of continuity, the source said.

The US, the European Union and others have cast doubt on such assurances, saying formal recognition of the new government — and the economic aid that would flow from that — is contingent on action.

The foreign minister of current EU president Slovenia told Reuters the bloc was "far from even tackling this question", which EU leaders might discuss at summits next month. Some EU states consider the Taliban "a terrorist organisation".

If the EU — the world's biggest aid donor — decides to recognise the Taliban government, "aid is the leverage that the European Union has" in setting conditions, Anze Logar said.

The Taliban have promised safe passage out of the country for any foreigners or Afghans left behind by the huge airlift which ended when US troops withdrew on Monday. But with Kabul airport still closed, many were seeking to flee over land.

Qatar's foreign minister said the Gulf state was talking with the Taliban and Turkey about potential technical support to restart operations at Kabul airport, which would facilitate humanitarian assistance and possibly more evacuations.

British Foreign Secretary Dominic Raab said he would discuss securing safe passage through third countries with regional leaders.

"We need to adjust to the new reality" in Afghanistan, he said.

‘Surrounded’

In Panjshir, the NRFA spokesman said its forces had killed large numbers of Taliban fighters on two fronts since clashes first broke out earlier in the week.

"It has been proven to the other side that they cannot resolve this issue through war," the spokesman said.

Both sides provided varying figures for the other's casualties, without offering evidence. It was not possible to verify the numbers of fighters on either side killed.

The Taliban say the Panjshir valley is surrounded on all four sides and a rebel victory is impossible. The rebels say they will refuse to surrender.