Afghan President Hamid Karzai said on Sunday two districts in southern Helmand province that have seen some of the heaviest fighting between NATO-led forces and insurgents would be among those handed over to Afghan forces in coming months.

The last minute inclusion of Nad Ali and Marjah districts on a list of areas chosen for the second phase of a gradual security handover from foreign troops suggests Afghan forces are willing to take over challenging terrain that will require regular combat with insurgents.

The two areas, sites of some of the biggest offensives of the war in recent years by U.S. Marines and British forces, were not on a draft list published in October.

When this phase is complete, likely to be early next year, the majority of Afghans will look to their own police and army for security, rather than foreign troops.

With today's decision by the President, over half of the country's population would now be covered by the Transition Process, Karzai's office said in a statement.

Transition is due to be finished, and all foreign combat troops home, by the end of 2014, under a plan agreed by NATO-led forces and Karzai. Some officials have suggested that the bulk of the handover could be completed long before that date.

Implementation of the second stage of the plan could start as soon as December, a NATO official said last month. Karzai's office did not propose dates for this stage of the process.

In the first phase of the transition which began in this summer, Afghan troops were put in charge of a handful of areas, some of which were then attacked by Taliban insurgents fighting against Karzai's government and its Western backers.

Many places chosen for the next transfer are in the relatively peaceful north, where several provinces will be handed over in their entirety.

But the list also includes parts of Wardak and Ghazni provinces, which lie west and southwest of the capital Kabul and have a heavy insurgent presence, along with Jalalabad, the most important city in the eastern region that borders Pakistan.

HELMAND CHANGES

Helmand's Marjah district was chosen in early 2010 to showcase a revised U.S. counter-insurgency strategy, with NATO and Afghan forces flooding into the district followed by the much-touted rollout of a government in a box meant to provide services to win over the local population.

Instead, critics say delays caused by stiff Taliban resistance and inadequate Afghan government support turned the campaign into a cautionary tale. But NATO-led forces said late last year that the battle for the town was essentially over.

Nad Ali is another former Taliban stronghold, but British forces stationed there have been eying it for several months as a candidate for transition, after major security improvements.

But both Marjah and Nad Ali still have a sizeable insurgent presence and Afghan forces will face some tough fighting.

Lashkar Gah, the provincial capital of Helmand, which was handed over to Afghan troops in the first stage of the transition, sustained several attacks in recent months.

However, it also came under attack when foreign forces were in charge of security there, and transition is broadly considered to be on track.

Despite the presence of tens of thousands of Western forces in Afghanistan, the United Nations and other groups say violence is at its worst since U.S.-backed Afghan forces toppled the Taliban from power in late 2001.

NATO-led forces say they have seen a decline over recent months in attacks launched by insurgents against their troops.

(Writing by Emma Graham-Harrison; Editing by Peter Graff)