Security has improved in most of Afghanistan but insurgent sanctuaries in Pakistan and pervasive corruption pose "long-term and acute challenges" in the war effort, a Pentagon report said Tuesday.

The issuing of the report to Congress came as US President Barack Obama made a surprise visit to Afghanistan, signing a partnership deal with Kabul pledging US aid after 2014, when all NATO combat troops are due to leave the country.

"The year 2011 saw the first year-over-year decline in nationwide enemy-initiated attacks in five years. These trends have continued in 2012," said the report, which covered the period from October 2011 to March 2012.

But despite the progress, "the campaign also continued to face both long-term and acute challenges," it said.

"The Taliban-led insurgency and its al Qaeda affiliates still operate with impunity from sanctuaries in Pakistan.

"The insurgency's safe haven in Pakistan, as well as the limited capacity of the Afghan Government, remain the biggest risks to the process of turning security gains into a durable and sustainable Afghanistan," said the report.

The Afghan government also is hampered by "widespread corruption" that undermines its legitimacy and plays into insurgent propaganda, said the report, which is based on assessments from the US military, intelligence agencies, diplomats and the Justice and Agriculture departments.

With the Haqqani network and other insurgents based over the border in Pakistan, eastern Afghanistan remains "volatile" and more violent than other regions, it said. About a third of all insurgent attacks occurred in the east during the reporting period.

In the southern provinces of Kandahar and Helmand, once entrenched bastions for the Taliban that have been a primary focus for US-led troops, security continues to improve, the Pentagon report said.

A senior defense official expressed optimism that Afghan forces would be ready to take over security for the whole country as scheduled by the end of 2014.

"Over the last year, as we put the ANSF (Afghan National Security Forces) more and more in the lead we have seen them at times do better that we'd expect, sometimes even do better than they would expect," the official, who spoke on condition of anonymity, told reporters.

About 87,000 US troops and 44,000 other international forces are deployed in Afghanistan along with 344,000 Afghan army and police, the report said.

The report also played down the effect of recent attacks by Afghan soldiers on coalition troops, which NATO refers to as "green-on-blue" incidents.

Although "statistically small in number," the attacks had a "negative" operational and strategic impact, the report said.

"These attacks have not yet caused a major diplomatic rift, nor have they significantly hurt relations between the ANSF and ISAF (International Security Assistance Force)," it said.

Most of the assaults were not a result of the Taliban infiltrating Afghan forces but "are due to isolated personal grievances against coalition personnel," the report said.

From May 2007 to March 2012, there were 52 insider attacks that killed 86 soldiers or foreign civilians and wounded 115 others, according to the report.

The pace of the attacks, however, appears to be accelerating.

Since the start of the new year, 18 foreign troops have been slain in the fratricidal attacks by Afghan soldiers, accounting for nearly 20 percent of coalition casualties, according to a tally by AFP.

Of the 18 killed, 10 were Americans, five were French, two were British and one soldier was Albanian.