"We have been talking to the Taliban as countryman to countryman, talk in that manner," Karzai told CNN's Larry King when asked about a Washington Post report on secret high-level talks between the two sides.
"Not as a regular official contact with the Taliban with a fixed address but rather unofficial personal contacts have been going on for quite some time," he said in excerpts of the CNN interview to air in full Monday.
Last week the Washington Post said the secret talks were believed to involve the Afghan government and representatives authorised by the ‘Quetta Shura’ and Taliban leader Mullah Omar.
The Karzai interview is being aired a day after Afghanistan's former president Burhanuddin Rabbani was elected chairman of a new peace council, a Karzai brainchild set up to broker an end to the war with the Taliban.
"Now that the peace council has come into existence, these talks will go on and will go on officially and more rigorously I hope," Karzai told King.
The Taliban, which have been fighting an increasingly violent insurgency, have said publicly they will not enter into dialogue with the government until all 152,000 US-led foreign troops based in the country leave.
Karzai said there had been "no official contacts" with any Taliban entity.
"That hasn't happened yet and we hope we can begin that as soon as possible," he said. "But contacts of course have been there between various elements of the Afghan government at the level of community and also at a political level."
The High Peace Council is intended to open a dialogue with the Taliban who have been trying to bring down his government since the US-led invasion overthrew their hardline Islamist regime in October 2001.
The 68-member council, hand-picked by Karzai, was set up following a nationwide conference in June and was inaugurated on October 7.
But Karzai said he would not reach out to groups such as Al-Qaeda or other "terrorist networks".
Karzai also dismissed claims in a new US book about his mental health.
"Oh definitely not. Rather funny," Karzai said when asked by King about the allegations in legendary reporter Bob Woodward's book "Obama's Wars" which says US intelligence suspects Karzai has received treatment for manic depression.
"He's on his meds, he's off his meds," the US ambassador to Afghanistan, Karl Eikenberry, is quoted as saying. But Karzai said the strongest medication he had taken was an antibiotic to stave off a bad cold, along with vitamins and headache pills.
US President Barack Obama's administration has had a shaky relationship with Karzai, publicly challenging him last year over allegations of corruption and vote-rigging.
The public criticism has stung Karzai, who has raised eyebrows in Western capitals by accusing foreigners of rigging the election that returned him to power last year.
Karzai said Afghanistan enjoyed a "strategic relationship" with the United States, which is planning to draw down its troop numbers in 2011.
"Relations with the president Obama are very good. We have regular contact."
But he said Afghan people fear they would be "abandoned" by the United States.
"Something that I have not been able to reassure the Afghan people and I hope the United States of America and our other allies will help us through good means so we can reassure the Afghan people that this partnership is staying and that Afghanistan will emerge out of this current transition into a better country, a better economy and a more stronger, effective state."
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