The Taliban insurgency has gained strength in Pakistan’s border regions with Afghanistan in recent months despite a sustained government offensive against it, the Obama administration said in a stark new assessment of the war effort.

The report, sent to Congress on Tuesday, praises Pakistan’s military for confronting the insurgency in several border regions, which Taliban forces use as training and staging areas to attack U.S. forces in Afghanistan.

But the report says that in one area, the military has conducted a “major clearing operation” three times in the past two years. The most recent operation, it concludes, is “a clear indicator of the inability of the Pakistan military and government to render cleared areas resistant to insurgent return.”

“There remains no clear path toward defeating the insurgency in Pakistan,” the report says.

The administration’s report to Congress is a semiannual appraisal of the progress and remaining challenges facing the United States in Afghanistan and Pakistan. This one comes as the administration prepares to withdraw some of the roughly 100,000 U.S. troops from the country in July and as domestic support for the war has reached new lows.

Much of the unclassified version of the document echoes the administration’s December review of the war effort, which underscored steady military gains in Afghanistan since Obama ordered an additional 30,000 troops to the country a year earlier but which called them “fragile and reversible.” That warning is also in this report, which emphasized that “the challenge remains to make our our gains durable and sustainable.”

But the report also evaluates U.S. efforts over the first three months of this year, and it underlines alarming trends in that period beyond the “deteriorating” security conditions in Pakistan’s tribal agencies.

It notes that in recent weeks, the Taliban has carried out more suicide bombing missions in Afghanistan against soft targets, such as army recruiting centers, government buildings and market places, leading to a “spike in civilian casualties.”

“The shift in the Taliban’s greater use of murder and intimidation tactics reflects an insurgency under the pressure of a more substantive coalition military campaign, particularly with the full complement of surge forces in place,” the report says. “That said, there are also indications that the Taliban remains confident of its strategy and resources, and heavy fighting is expected to resume this spring.”

The report notes that the transition of some parts of the country from U.S. and international troops to Afghan security forces is scheduled to begin this spring, and President Hamid Karzai recently identified a handful of areas where Afghan troops would soon take the lead.

Elsewhere, the report notes, security remains uneven and the dangerous conditions are hampering Karzai’s ability to effectively staff local governments.

As the report says, “key district and provincial positions remain vacant or filled by unqualified individuals.”

The report also warns of imminent money problems for the Afghan government, largely because of the “Afghan government’s inability, thus far, to respond adequately and prosecute those responsible for the Kabul Bank financial crisis.”

The bank lost hundreds of millions of dollars in the fall after the crash of the Dubai real estate market, in which it was heavily invested. Some of Karzai’s political allies benefited from millions of dollars in risky real estate loans.

The report says the Afghan government’s inability to hold Kabul Bank executives accountable “has given [international] donors concern about the efficacy of donor resources.”

“This dynamic — which accelerated during the first part of this quarter — could jeopardize longer-term donor assistance to Afghanistan” the report says.

The crisis has also complicated talks between the International Monetary Fund and Karzai’s government over a new loan program, vital to help fund the government and push forward with development programs.

“Several major international donors have said that without an IMF program they will have to reduce or suspend the amount of assistance funds they provide to the Afghanistan Reconstruction Trust Fund,” the report says.

Staff writer Greg Jaffe contributed to this report.