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U.S. President George W. Bush and Afghanistan's President Hamid Karzai hold a joint press conference after their meetings at Camp David. ((J. Scott Applewhite/Associated Press))

Afghan President Hamid Karzai said Monday the Taliban was a defeated and frustrated force that poses no threat to the stability of his country's government.

"They're not posing any threat to the government of Afghanistan," said Karzai, who spoke during a news conference with U.S. President George W. Bush after wrapping up two days of talks at Camp David, Md.

He acknowledged the apparent resurgence of the Taliban is a problem, but said they are "acting in cowardice" by targeting innocent Afghans, such as aid workers and schoolchildren.

"It's a force that's defeated, it's a force that is frustrated," he said."They are acting in cowardice by killing children."

Bush and Karzai also agreed they would not offer any incentives to the Taliban to free 21 South Korean hostages being held for more than two weeks, said a White House spokesperson. The Taliban has demanded the release of imprisoned militants.

The two leaders vowed to continue the hunt for Islamic extremists, including senior al-Qaeda figures, believed to be hiding out in the mountainous region along Afghanistan's border with Pakistan.

The Taliban sheltered al-Qaeda leaders while it was in power in Afghanistan.

Bush said he's confident that with the right intelligence, the U.S. and Pakistan governments can take out al-Qaeda leaders.

"With real actionable intelligence, we will get the job done," said Bush, who refused to say whether he would wait for permission from Pakistani President Gen. Pervez Musharraf before acting on such intelligence.

Karzai said he and Musharraf, who are meeting later this week in the Afghan capital of Kabul, would discuss how to tackle the problem of lawlessness and extremist hideouts along the border area.

"Our enemy is still there, defeated but still hiding in the mountains.And our duty is to complete the job, to get them out of their hideouts in the mountains," said Karzai.

Bush and Karzai put a positive spin on Afghanistan's progress since the 2001 defeat of the Taliban, but they stressed that serious problems remain.

"There is still work to be done, don't get me wrong," Bush said. "But progress is being made, Mr. President, and we're proud of you."

More than 2,500 Canadian soldiers are serving in Afghanistan's southern Kandahar region. Sixty-six soldiers and one diplomat have been killed since the mission started in 2002.

With files from the Associated Press