The two countries had built up forces on their border after Iranian diplomats and a journalist were killed in an offensive by the Taleban, the Muslim fundamentalist militia who control about 90% of Afghan territory.

But Mr Brahimi, speaking in Islamabad said the recent release of all Iranian prisoners by the Taleban had improved the situation. He said he will visit Tehran on Tuesday to convey the Taleban's demand that Iran and the Afghan opposition release Taleban prisoners.

Lakhdar Bramini is to take the Taleban demands to Tehran

He would also seek Tehran's response to his proposal of direct negotiations between the Taleban and Iran. The Taleban had already agreed to this proposal.

"There is still a lot to be done to bring peace to Afghanistan," the envoy admitted however, citing the recent fighting between the Taleban and its opponents for the north-eastern town of Taloqan, which Mr Brahimi said had reportedly changed hands twice during the previous 24 hours.

Red Cross stops flights

Meanwhile the International Committee of the Red Cross has suspended flights to the Afghan capital, Kabul, because of rocket attacks on the airport.