UN envoy Mahmoud Mestiri said after a 90-minute meeting with the Taliban movement at nearby Charasyab that they insisted that the long-delayed transfer of power from President Burhanuddin Rabbani "cannot take place" with rival mujahedin forces holding different parts of Kabul.
There has been no shooting yet between the two sides, but on Friday a Taliban fighter was wounded by a mine.
The Talibans have branded the mujahedins "criminals" because of their factional fighting, and have vowed to impose strict Islamic law across the country. They are now believed to control one third of Afghan territory.
Mr Mestiri said that although the Talibans have declared their support for the UN peace process, they still refuse to join the so-called "mechanism", referring to the body which will handle the transfer of power from Mr Rabbani, whose two-year term expired last December.
Mr Rabbani was insisting on the direct participation of the Talibans, which observers speculated would lead to more delays in the transfer of power, already seven weeks overdue.
Mr Mestiri noted that in addition to the issue of security, the Talibans were demanding that the mechanism be made up of "good Muslims", and that there be one representative from each of Afghanistan's 30 provinces.
Meanwhile, Benazir Bhutto, the Prime Minister of neighbouring Pakistan, has reiterated her country's neutrality regarding the current problems in Afghanistan.
"Since the new government was elected in Afghanistan in October 1993, we've adopted a very firm `hands-off' policy," she said. "We have no favourite in Afghanistan, and we do not want to interfere and influence this power- sharing formula."
Ms Bhutto dismissed allegations that her government supported Taliban: "Taliban locked women up behind closed doors so how could a woman leader be helping them into power?" - AFP