Cables released by WikiLeaks reveal US concerns over President Karzai's character and rampant corruption in his country.
Karzai's character as well as ability are questioned in US embassy memos obtained by the whistleblower website and published by the Guardian, a UK newspaper, late on Thursday.
Karl Eikenberry, the current US ambassador to Afghanistan, in a 2009 cable describes Karzai as "insecure" and a "paranoid and weak individual".
"Indeed his inability to grasp the most rudimentary principles of state-building and his deep seated insecurity as a leader combine to make any admission of fault unlikely, in turn confounding our best efforts to find in Karzai a responsible partner," Eikenberry said.
Eikenberry added that Karzai continually blames the US and its allies for Afghanistan's problems rather than looking at the problems of his leadership, and that his attitude was unlikely to change.
The cables state that Karzai's own ministers accused him of going along with criminal activity. One case cites Karzai's ordering of the physical intimidation of the official heading a team negotiating with the Taliban.
US officials in the memos view Ahmed Wali Karzai, the half-brother of the president and senior official in Kandahar, as corrupt and call the Karzai family a "semi-modern aristocracy".
"As the kingpin of Kandahar, Ahmed Wali Karzai (AWK) dominates access to economic resources, patronage, and protection.
"Much of the real business of running Kandahar takes place out of public sight, where AWK operates, parallel to formal government structures, through a network of political clans that use state institutions to protect and enable licit and illicit enterprises."
Al Jazeera’s James Bays, in Kabul, said that the documents showed a declining confidence in Karzai's presidency.
"Certainly there is criticism of some of the things he has done, like releasing some prisoners from jail ... said to be for tribal, political reasons.
"The cables show a progression of when Karzai has been in power - from total confidence in him to now when they are deeply concerned."
The leaked cables reveal mounting US worries over corruption in Afghanistan and the flight of "vast amounts" of money from the country.
One memo from October 2009 stated that Ahmed Zia Massoud, the then vice-president, had been found with $52m in a suitcase when stopped at Dubai airport.
Massoud has denied the claim.
US diplomats also criticised the role of UK troops in Afghanistan, saying their effort was "not up to standard" in southern Helmand province, a stronghold of the Taliban.
"We and Karzai agree the British are not up to the task of securing Helmand," US diplomats from the Kabul embassy said in a 2008 cable.
In a separate cable sent in February 2009, Karzai complains that UK forces had allowed law and order to breakdown in Helmand.
"When I first returned to Afghanistan, I had only 14 American soldiers with me," the cable quoted Karzai as having said.
"Helmand was safe for girls to go to school. Now ... British soldiers are in Helmand, and the people are not safe.
"We must stand on a higher moral platform than the bad guys."
General Dan McNeill, the commander of Nato forces in Afghanistan from 2007-2008, was reported to have said to a US drug-control officer in April 2007 that the British "had made a mess of things in Helmand, their tactics were wrong".
Gulab Mangal, Helmand's governor, was also quoted in a cable sent from the US embassy in Kabul as telling a US team led by Joe Biden, the vice-president, that US forces were needed urgently due to British security in the town of Sangin failing to extend even to the main bazaar.
"I do not have anything against them [the British] but they must leave their bases and engage with the people," Mangal said.
"Stop calling it the Sangin district and start calling it the Sangin base - all you have done here is build a military camp next to the city."
The UK has reacted to the leaked memos, stating that their troops had performed well and that safety in Sangin - which the US now maintains responsibility for - was improved by their presence.
"British forces did an excellent job in Sangin, delivering progress by increasing security and taking the fight to the insurgency," the UK's ministry of defence said in a statement.
"Both Afghan leaders, including the governor of Sangin and the US Marines, have publicly recognised and paid tribute to the sacrifice and achievements of British forces in that area," a spokesman added.
Nato forces have been in Afghanistan since 2001, following a US invasion of the country to remove the Taliban, whom they accused of harbouring al-Qaeda operatives connected to the September 11 attacks, from power.
This year has been the most violent since the campaign began.
The UK has 10,000 troops in the country, now costing more than £5bn ($7.7bn) a year, of about 150,000 foreign troops in Afghanistan.
The WikiLeaks website began releasing a trove of classified US diplomatic cables on Sunday, infuriating Washington, which called the leak an "attack on the international community".