United Nations Secretary-General Ban Ki-moon says Afghanistan faces a critical test in 2009, as it prepares to hold credible elections in the coming months.

In a report released Friday, Mr. Ban says preparations for the August 20 elections will likely take place during a period of intensified fighting and deteriorating security.

The U.N. chief called for the U.N. mission to be extended for another year, to ensure elections are held in a secure environment where freedoms of expression, media and assembly are guaranteed as much as possible.

Mr. Ban also noted some reasons for optimism.  He said a judicious deployment of international troops would be a welcome development.  He also cited a strengthening of Afghanistan's own security forces and a decrease in poppy production.

Afghanistan produces more than 90 percent of the world's heroin from its poppy crops.

Separately, the U.N. refugee agency and Pakistan's government signed a letter of intent Friday to allow registered Afghans to extend their stay in Pakistan until the end of 2012.

Meanwhile, The New York Times reports that President Barack Obama's new strategy on Afghanistan will work to lure militants away from the Taliban and al-Qaida.

Mr. Obama is expected to release the results of his strategy review as early as next week.

In an interview published in the The New York Times on Sunday, Mr. Obama said the United States is willing to explore the possibility of reconciliation with moderate Taliban members in Afghanistan and Pakistan.

The Obama administration has said it believes a majority of insurgents can be convinced to lay down their weapons with the proper incentives.

Mr. Obama is expected to release his strategy before Secretary of State Hillary Clinton attends an international conference on Afghanistan later this month.

Mr. Obama has already approved the deployment of an additional 17,000 troops to Afghanistan.

Some information for this report was provided by Reuters.