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Tribal elders from Panjwai District say they spent weeks trying to secretly arrange a peace deal between the Taliban and the government, but their desperate efforts to put a lasting end to the violence in their villages appear to have faltered in the past few days.

It's not clear whether all hope of a ceasefire in Panjwai has been scuttled, and many details of the talks remain shrouded in secrecy, but interviews with senior politicians, Panjwai elders and a Taliban source found most players are pessimistic about their chances of avoiding another major battle in the ravaged district southwest of Kandahar city where more than half of all Canadian combat casualties have occurred.

Canadians say they were not involved, but a delegation of elders met on Saturday with Kandahar's governor and declared that Canadian, U.S. and Afghan soldiers would not retreat from a hill near Sperwan, a village roughly 30 kilometres southwest of Kandahar city.

"The issue was the checkpoint on the hill," said Ahmed Wali Karzai, chairman of Kandahar's provincial council, who attended the meeting. "The government doesn't want to pull back."

Three months ago, Canadian troops led their allies into the biggest battle Afghanistan has witnessed since 2001, smashing Taliban strongholds and carving out a small zone of government control in Panjwai. Canadians remain on the front lines in Panjwai, holding positions against daily skirmishing by the insurgents. The standoff can be resolved two ways, elders say: negotiations, or fighting.

Despite the fact that Canadian soldiers would provide the majority of the firepower for any further ground offensives, an official in Kandahar said no Canadians were participating in the talks.

The idea of peace talks was first raised a few weeks ago at Panjwai's local council, said member Haji Nematullah, 46. There was broad support for reaching out to both sides of the conflict, he said, despite misgivings about the warring forces.

Many ordinary people blame the Taliban for bringing their fight into Panjwai, Mr. Nematullah said, but most villagers also mistrust the foreigners. Mr. Nematullah himself said he has reason to be resentful, after he was wrongly suspected of hiding a missile and detained by Canadian troops along with fellow councilman Haji Noor Mohammed, 50. (A Canadian military spokesman said he is not allowed to talk about specific detainees.)

After his release, Mr. Mohammed was among a dozen Panjwai council members selected to negotiate on behalf of the elders. The bargaining team visited the village of Zangabad, just southwest of the military outpost in Sperwan, for a clandestine meeting with local Taliban commanders. They were encouraged by the talks, and went to Pakistan for further meetings. A Taliban source said their most important negotiating partner among the insurgents was Mullah Mohammed Mansoor, former minister of air transportation in the Taliban regime, and now a regional Taliban commander for Kandahar.

Mr. Karzai said the elders weren't bargaining with the Taliban, but rather serving them notice that they wouldn't be welcome in Panjwai.

"They were not negotiating with Mansoor," Mr. Karzai said. "They were telling him their terms."

Other elders said negotiations initially seemed feasible, even though the first demands suggested by their Taliban contacts seemed exceptionally tough: the withdrawal of foreign troops from Afghanistan; a declaration that Taliban aren't terrorists; and a role for Taliban leaders in government.

A Taliban source said the insurgents' opening position may have been unrealistic, but it was negotiable. The Taliban also felt cynicism about the process, the source said, because they didn't believe their demands would be accurately transmitted from the provincial government to foreign troops. "People in the government don't want us to join the government," the Taliban source said. "They want to fight."

Mr. Karzai said the proposal the elders took to the government included a key demand: Removal of government and foreign troops from Sperwan. The provincial council has rejected this idea, he said, but it might still be possible to show goodwill by moving the Sperwan base to a nearby location.

But others say the talks are dead.

"Some elders from Panjwai sat together and thought they could solve the problem," said Haji Aga Lalai, head of the Panjwai council and a member of the provincial council. "But NATO [the North Atlantic Treaty Organization]and the government don't want this kind of negotiation."