The west's strategy in Afghanistan has been thrown into disarray after the Taliban said they had suspended preliminary peace talks with the US, and the Afghan president, Hamid Karzai, called for coalition troops to retreat to their bases and end patrols through Afghan villages.

In statements released within minutes of each other on Thursday, the main opponent and main partner of Nato-led forces in Afghanistan trampled on military and political blueprints that the coalition had hoped might allow them to exit the country without leaving it in chaos.

"I'm really shocked, these are two pieces of very bad news," said one senior western diplomat in Kabul. "It's probably the bleakest day of my time here in Afghanistan."

The mission has suffered a series of setbacks as a result of demonstrations against the burning of the Qur'an by American soldiers and the massacre of 16 civilians by a US gunman.

Hopes of a decisive military victory over the insurgency had long been abandoned, and the Taliban announcement last year that they would open a political office in Qatar had appeared to offer a real prospect of serious negotiations after years of false starts and dead ends.

But the Taliban suspended talks on Thursday, because the group faced "unacceptable demands". The news came in a statement that did not detail the problems but described Washington as "shaky, erratic and vague" and rejected any discussion with Karzai's government as pointless.

The sticking point in talks between the Taliban, Karzai's government and the US is the terms of a prisoner exchange involving five Taliban leaders held at Guantánamo and a westerner held by the Taliban.

Karzai's office said that his statement summarised comments made in a meeting with the visiting US defence secretary, Leon Panetta.

Karzai said he wanted a nationwide handover of security from western to Afghan forces completed by the end of 2013, a year ahead of the current schedule. He also wants foreign soldiers to return to their bases immediately, leaving Afghan villages and ending patrols that have been a key component of the war.

"Afghan security forces have the ability to keep the security in rural areas and in villages on their own," the statement said.

If this demand is met, it would spell the end for the current coalition military approach, which aims to push out insurgents and win over the civilian population village by village.

Karzai's call to put Afghan troops in charge by the end of 2013 matches recent plans agreed by Barack Obama and David Cameron for a quicker shift for their troops from a lead fighting role to a support role.

The Obama administration rebuffed Karzai's call for an immediate withdrawal of US and other international forces from villages. It also played down the Taliban walkout from the reconciliation talks, portraying it as part of the normal "ups and downs" of any such peace negotiations.

The White House spokesman Jay Carney said there were no plans to change the current strategy and insisted the US was still working to a 2014 deadline.

The Pentagon spokesman, George Little, said the US and Afghan governments shared the same goals, and Karzai's statement reflected "President Karzai's strong interest in moving as quickly as possible to a fully independent and sovereign Afghanistan". He added: "We believe that we need to continue to work together because that's an American goal as well."

Some diplomats dismissed Karzai's demand that soldiers return to their bases as political posturing, pointing out that he had made the same request before, though in less high-profile settings.

"He wants it but he will not get it. It's impossible because their forces are not ready," said another senior western diplomat. "They may, however, be ready next year and that demand is nothing new, it is what Cameron and Obama were talking about."

The embassy in Kabul said the US aimed to have Afghans in charge of security by the end of 2013, but did not directly comment on the demand that troops return to bases. "At the upcoming Nato summit we'll determine the next phase of transition, which includes coalition forces shifting to a support role in 2013," said spokesman Gavin Sundwall.

The Taliban statement left open the possibility that dialogue could resume in future if "the Americans clarify their stance on the issues concerned", and the faction that originally pursued negotiations is unlikely to have lost interest in a political solution.

"If the Taliban fight on they are simply involved in a violent power struggle over who gets to take over after the US departure," said Michael Semple, a Taliban expert and fellow at Harvard University.

"Pragmatists in the Taliban movement want to settle this at the negotiation table rather than on the battlefield, which is why they have left the door ajar for resumption of talks. But they are still not convinced that the Americans are serious about these talks, which is why they have decisively bounced the ball back into the American court."

The US embassy in Kabul said Washington remains committed to supporting an Afghan peace process, and its position has been consistent.

"For a Taliban political office to open the Afghan Taliban must make clear statements distancing itself from international terrorism and in support of a political process among all Afghans to end the conflict in Afghanistan," said Sundwall.

The US soldier blamed for the shooting was flown to Kuwait on Wednesday. This may have been an attempt to defuse tension but the Obama adminstration said it was normal practice in such cases.

Victoria Nuland, a state department spokeswoman speaking at the daily briefing in Washington, said US policy was to facilitate talks between the Taliban and Karzai. If the Taliban want an office opened in Qatar and a release of prisoners, they would not achieve that through walking away from the negotiating table, she said, adding: "It takes two to tango."

She insisted the Taliban would have to accept the Afghan constitution, renounce violence and cut ties to terrorists.

Dangling the carrot of prisoner releases, she said a decision had not been made one way or another yet.

Asked if the Taliban statement reflected a feeling that after the Qur'an burnings and the massacre, the Taliban might feel emboldened to wait out the US and international forces, she insisted US involvement would continue beyond 2014.

On Karzai's call, she said that the US and the Afghan government both wanted the same goal, the transfer of security to Afghan forces, and the only differences were in timelines. These would be addressed at the Nato summit in the spring.