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Representatives from more than 60 countries have attended a landmark international conference in the Afghan capital Kabul to discuss a timetable for the handover of security.
They agreed that Afghan forces should begin taking security responsibility in some areas by the end of this year and should lead security operations in all provinces by the end of 2014, according to the final communique.
"Afghan National Security Forces (ANSF) should lead and conduct military operations in all provinces by the end of 2014," the communique said.
The country's president Hamid Karzai said Afghanistan and the Western powers backing it shared "a vicious common enemy".
But, he said, victory would come in giving Afghans as much responsibility as possible in combatting the insurgency within its borders.
Nato Secretary-General Anders Fogh Rasmussen said the alliance would never allow the Taliban to topple the government of Afghanistan.
But he said that transition to Afghan-led security would be based on "conditions, not calendars".
The conference is the biggest international meeting ever to be held in Kabul.
Thousands of Afghan police, military and security forces, backed up by Nato forces, put Kabul under a security lockdown to guard against possible Taliban attack.
The Foreign Secretary William Hague is representing the UK.
Britain has just announced it is increasing the amount of aid it is giving to Afghanistan to £700m - an increase of £200m.
Britain hopes to withdraw frontline combat troops by 2014.
The conference comes in one of the most bloody periods for international forces since the toppling of the Taliban in 2001, with 13 British deaths this month alone.
Sky News chief correspondent Stuart Ramsay, in Kandahar, said: "At the moment the Afghan Army would disintegrate immediately if the US and British troops withdrew.
"Whether we leave a country on the verge of war in 2014 remains to be seen but there is still a huge amount of work to be done between now and then."
Over $40bn has been spent on Afghanistan since 2002, says the charity Oxfam, and around half went towards training and equipping an army and police force to take over security.
Amid fears that peace efforts will bring Islamist extremists into the government, US Secretary of State Hillary Clinton sought to assure Afghan women that they would not be forgotten.
Clinton and European Union foreign policy chief Catherine Ashton told Afghan women leaders that the West will not allow Afghanistan to return to the days of Taliban rule, when women's rights and issues were severely restricted and ignored.
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