Karzai and many other Afghans were infuriated was a move by the Taliban to cast their new office in the Gulf nation of Qatar as a rival embassy. The Taliban held a ribbon-cutting ceremony Tuesday in which they hoisted their flag and a banner with the name they used while in power more than a decade ago: "Political Office of the Islamic Emirate of Afghanistan."
American officials scrambled to preserve the possibility of dialogue with the militants. U.S. Secretary of State John Kerry spoke with Karzai on the phone, telling him that his concerns were justified and that he would work to resolve the issue.
The United States announced Tuesday that they would pursue negotiations in the Qatari capital of Doha - at least initially without the Afghan government. According to the Associated Press, Karzai probably agreed to the Doha talks reluctantly and under U.S. pressure. Karzai has for years opposed talks outside Afghanistan and dominated or directed by the U.S.
The Taliban have never really wanted to negotiate with Karzai, preferring to talk directly with the U.S.
In a statement released by his office, Karzai lashed out at the U.S., using his leverage with Washington by suspending negotiations over what presence the United States will keep in Afghanistan after 2014. He said his High Peace Council would not enter talks with the Taliban until the negotiations were "completely Afghan."
He also criticized the Taliban and insisted that they halt their attacks on the ground before negotiations can begin.
But the Taliban appeared in no mood to lay down their arms. They claimed responsibility for a rocket attack on Bagram Air Base outside Kabul that killed four American service members late Tuesday.
The Associated Press contributed to this report.