Afghan President Hamid Karzai speaks to lawmakers at parliament in Kabul Thursday. He called on both Afghan lawmakers and international allies to do more to stamp out the corruption that pervades the country's government. (Musadeq Sadeq/AP)

Ahead of an international conference aimed at collecting billions more in foreign aid for Afghanistan, President Hamid Karzai on Thursday urged his government to step up the fight against the corruption that has eroded his administration’s credibility over the years.

“Corruption has reached its peak in this country,” Karzai told lawmakers in parliament in Kabul. “It is our responsibility to improve. If we heal this pain, then Afghanistan will be independent and progressive.”

Karzai’s address appeared to be an attempt to begin changing the narrative about his government’s ability to handle the flood of funds that the United States and other NATO countries intend to keep sending to Afghanistan, even after the bulk of U.S. troops withdraw by the end of 2014. Donor nations have voiced greater determination to link future funding to improvements in Afghan governance, a subject likely to be discussed at a conference on Afghanistan in Tokyo next month.

NATO officials had anticipated Karzai’s speech Thursday as an important indicator of his intent to pursue a legacy of reform in the two years he has left in office.

His government has done little to address years of allegations of graft and cronyism and has often deflected the criticism onto U.S. companies operating in Afghanistan. Skepticism among the international community here remains high. “He’ll sing a pretty song on Thursday,” one NATO official said before the speech.

While welcoming the spirit of Karzai’s message, Western diplomats in Kabul took a wait-and-see approach. Some viewed the speech as typical for a political leader near the end of his tenure and eager to leave a positive legacy. Others interpreted it as a calculated effort to attract as much funding as possible at the Tokyo conference.

The conference is important for Afghanistan because both Afghans and coalition officials agree that the Kabul government requires billions of dollars a year in foreign aid, for development and for maintaining the Afghan army and police force, in the decade after 2014. But how much the donor nations will provide remains a subject of debate — and largely dependent on the perceived ability of Karzai’s government to prove that money sent to Afghanistan will not be siphoned off for personal gain.

Karzai has vowed to take steps against corruption in the past, to little effect. And many Afghans and international officials still view the issue as among his government’s greatest liabilities. Nearly two years after the Kabul Bank scandal, in which politically connected shareholders took nearly $1 billion in illegal loans, no one has been prosecuted or even gone on trial.

Karzai offered few specifics about possible new measures to address corruption, but he did ask “the foreigners, America and other countries, to not award their construction, building and commercial contracts to the government authorities and their relatives.” Afghans linked to government officials have profited handsomely over the years from U.S. contracts.

“This is a debate that I have had with them for the past four years. This causes corruption in the Afghan administration,” he said. “If America wants corruption to stop, then stop this.”

Among the Afghans who have profited from the gusher of U.S. aid and close government connections have been Karzai’s relatives. Watan Oil and Gas, a company owned by two of the president’s cousins, Rashid and Rateb Popal, was recently awarded a $3 billion contract in a joint venture with a Chinese firm to develop oil fields in northern Afghanistan, Britain’s Daily Telegraph newspaper reported Thursday. Others have profited off lucrative U.S. and NATO contracts over the years.

Karzai also called on the United States to send the former head of Afghanistan’s central bank back to Kabul for trial. Abdul Qadir Fitrat fled to the United States last year, saying that his life was in danger because he pushed the government to resolve the scandal at Kabul Bank. The Afghan government has accused Fitrat of complicity in the fraud. U.S. officials tend to support Fitrat and have said in the past that he is unlikely to return.

Karzai asked the lawmakers in parliament to join him in launching a new phase for the Afghan government, and he said he would lead by example.

“You should cooperate with me on these reforms,” he said. “You have accused me of making deals. Yes, I have done so, but I had reasons. And now I am changing this. I am bringing reform from the inside.”

Special correspondent Sayed Salahuddin contributed to this report.