Kabul, Afghanistan (CNN) -- It was supposed to be a day celebrating Afghan achievements in education. Instead, Afghanistan's embattled president broke down crying at an official gathering commemorating International Literacy Day.

In his emotional speech, Hamid Karzai lamented the estimated 10 million Afghans who are illiterate and repeated an appeal to Taliban militants to lay down their arms and expressed fear that his son might one day be forced to flee his country.

"I have pain in my heart," Karzai said, his voice breaking and his eyes red with tears.

"I'm afraid that my son, my own son will become a refugee one day. Please, I don't want my son and your son to be a foreign citizen. I want him to grow up here ...I want him to serve his nation," Karzai said, addressing an auditorium full of teachers, government ministers, foreign ambassadors and Girl Scouts gathered to celebrate the event.

After wiping his face with a handkerchief, Karzai urged Afghans to do more to educate their children. Several bearded men in the audience brushed away tears as the Afghan leader concluded his speech.

It's not clear what prompted the president's tearful soliloquy. But there is no question, Afghan observers say, that he and at least one close family member are currently facing strains on many fronts.

"Mr. Karzai is under a lot of pressure right now," said Mahmoud Saiqal, a former deputy foreign minister who served as a diplomat for several years under President Karzai.

"The constant drumbeat of negative news about progress in the country and news of problems with his family must be really having an effect on his ability to think clearly," said Candace Rondeaux, a Kabul-based analyst with the International Crisis Group.

The growing Taliban-inspired insurgency claimed another prominent Afghan government victim Tuesday morning when a bomb ripped through the vehicle of the deputy governor of Ghazni province on his morning commute to work.

The blast killed deputy governor Mohammad Kazem Allahyar, his brother, his son, and two civilian bystanders and wounded at least eight people including two bodyguards, said Ismail Jihangir, a spokesman for the Ghazni governor.

In a statement on Tuesday, President Karzai's office condemned the attack, calling it an act of terrorism.

Meanwhile, according to a report this week in the Wall Street Journal, one of the Afghan president's brothers, Mahmood Karzai, is currently being investigated by federal prosecutors in New York on charges of tax evasion. The New York Times reports the Afghan-American businessman is also being wiretapped by the U.S. National Security Agency.

Speaking to CNN by telephone from Dubai on Tuesday, Mahmood Karzai denied any wrongdoing, calling allegations that he committed extortion and racketeering "absolutely false" and "ridiculous."

He also said he was up to date on paying his U.S. taxes.

"All tax returns dating back to 1976 have been filed and completed."

Mahmood Karzai is an American citizen who splits his time between the United States, Dubai and Afghanistan. At the time of the overthrow of the Taliban, nearly nine years ago, Mahmood Karzai ran several Afghan restaurants in the United States. Today, he is the first vice chairman of the Afghanistan Chamber of Commerce and Industries and one of the most powerful businessmen in Afghanistan.

Karzai is also a major shareholder of Kabul Bank, which is struggling to survive after a series of risky real estate investments in Dubai helped lead to a run on the bank by investors earlier this month. The chairman of Kabul Bank, Sherkhan Farnood, is also the chairman of the Afghanistan Chamber of Commerce.

President Karzai has faced a drumbeat of criticism from Western governments in recent months, urging the Afghan government to crack down on corruption.

Until the recent Kabul Bank crisis, much of the criticism was focused on another Karzai brother, Ahmad Wali Karzai. He is the chairman of the provincial council in Kandahar and one of the biggest power brokers in southern Afghanistan.

In private conversations, Western diplomats often accuse Ahmad Wali Karzai of having links to Afghanistan's booming opium industry, charges Karzai routinely denies.

"It's not surprising that the U.S. government has turned its sights on members of the Karzai family," said Rondeaux of the International Crisis Group. "The question is ...is this a pressure tactic that's being used on the part of the American diplomatic corps to get a more vigorous response to the corruption question?"

In his phone interview with CNN, businessman Mahmood Karzai said he had not yet been contacted by American officials regarding the reported investigations, but vowed to cooperate fully with U.S. prosecutors if they came calling.

"I have nothing to hide. It should be easy for them to investigate me."

The U.S. Attorney's office in the Southern District of New York will not confirm or deny to CNN whether prosecutors are investigating the Afghan president's brother.

Asked about the reported investigation, U.S. Embassy spokeswoman Caitlin Hayden answered, "We refer you to the Department of Justice because we do not comment on legal matters."

Some Afghan analysts, however, welcome the development.

"How long should we tolerate criminal activities and corruption at higher levels and let it go?" asked Saiqal, the former Afghan diplomat.

"The majority of Afghans voted for Mr. Hamid Karzai, not his brother, not his cousin, not his tribe. Why anyone with the surname of Karzai should be in a position of power, that is an important question."