KABUL/WASHINGTON, 5 January — Afghan and US forces said yesterday they were closing in on Mulla Omar, the fugitive Taleban leader whose supporters have agreed to hand him over if the US bombing campaign is halted, in the southern mountains while US bombers struck a base in eastern Afghanistan they said was used by Osama Bin Laden’s men. US ground troops, working closely with Afghan fighters, were conducting house-to-house searches around Baghran in the south, where Kabul officials said they were fairly sure Mulla Mohammad Omar was hiding.

Also yesterday, the new government inked the final agreement on an international peacekeeping force. The accord, which was initialed earlier in the week, was signed by British Gen. John McColl, head of the International Security Assistance Force (ISAF), and Afghan Interior Minister Yunis Qanuni. McColl also left open the possibility that the six-month mission of the UN-mandated force could be extended "with the agreement of the interim administration and the international community".

Shortly after the signing ceremony, the country’s new Foreign Minister Abdullah Abdullah said Omar was hiding somewhere in southern Afghanistan and could be tried by an international tribunal when captured because he was a "war criminal".

A US Special Forces soldier was killed yesterday in a firefight in eastern Afghanistan, said Gen. Tommy Franks, commander of US military operations in Afghanistan. Franks said a member of the US Army Special Forces was killed by small arms fire near Gardez-Khost, and that no one else was injured. "What we know right now is that the mission that he was on, as a part of a team, was to coordinate with some local tribal elements in the vicinity of Gardez-Khost, in order to facilitate cooperation between our forces in the region and the local tribal elements in that region," Franks said.

Afghan and US officials, however, played down reports that Omar, who lost control of his stronghold at Kandahar a month ago, had already been captured. He is believed to be in the mountainous region of Baghran, 160 km northwest of Kandahar. Close to the Pakistani border in the east where Bin Laden was last believed sighted, B-52s dropped satellite-guided bombs on a compound the Pentagon believes was being used as a base by his Al-Qaeda network.

The hunt for Omar was hot but not over yet, officials said. "I don’t think he’s been captured yet. If he has been captured I would know it," Afghanistan’s interim leader Hamid Karzai told the US television channel ABC, adding a promise to hand him over to Washington if and when he was taken. Abdullah Abdullah sounded confident that the elusive Muslim cleric was close to capture.

Closer to the action, an aide to the new anti-Taleban intelligence chief in Kandahar told reporters that Afghan fighters had an area at Baghran sealed off and that US troops seeking Omar were searching from house to house.

"I have no news about Mulla Omar’s capture... We would know within half an hour if he is captured," said Nasratullah Nasrat, secretary to Kandahar intelligence chief Haji Gulalai.

Taleban commander Abdul Ahad, better known as Rayes Baghran, has said he will turn in Omar and surrender along with his force of up to 1,500 men, according to Nasrat. He said talks were continuing yesterday between Baghran and tribal elders in southern Helmand province, but if they failed, a massive raid to capture the fugitive Taleban leader would be unleashed. "We can’t wait longer than one or two days, otherwise of course we will attack them," Nasrat told AFP.

The US has offered a $10 million reward for the capture of Omar, who is wanted for harboring Bin Laden.