He expressed cautious optimism about the conduct of the presidential elections later this month, saying that about 70% of the eligible population, even in Helmand, the most violent province, "will be able to vote".

However, he said the turnout was likely to be lower than in the last presidential election, in 2004, and British officials conceded that one of the problems was that it was difficult to know the number of potential voters in any given area, let alone the total population of the country.

Sedwill was speaking by video link from Kabul to a Foreign Office press conference at which he was asked about recent comments by the foreign secretary, David Miliband, that reconciliation could involve speaking to the "moderate" Taliban.

The ambassador replied that he preferred to describe them as people "going with the Taliban" rather than "members of the Taliban". He added: "Maybe two-thirds of those fighting with the Taliban are in that category [and] possibly could be brought back into legitimacy."

They could integrate into Afghan society and institutions, he suggested, particularly if they were given jobs packages. All the candidates had stressed the importance of "reconciliation" in their election campaigns, Sedwill added, saying the election represented a milestone in the development of the country.

"We have to recognise that these elections are going to be pretty rough and ready in places. They will not be up to the standards of a western democracy. The test of success is whether they are credible, secure and inclusive enough that they are seen as credible by the people."

Sedwill said the international community was not giving the Afghan government carte blanche to decide if the elections represented a credible expression of Afghan opinion, but said it would be primarily for the Afghan political class to decide if they had been free and fair.

Apart from 450 EU monitors there will be 7,000 independent Afghan monitors. Votes will be counted in the provinces in an attempt to prevent ballot rigging, which he described as being on an industrial scale at the centre. The full result may not be known until September 17, nearly a month after the polling day on August 22.

If no single candidate gains a majority of the vote after the first round, the top two candidates will battle it out in a run-off in early October.

President Hamid Karzai, the favourite to win, won 55% of the vote on a 70% turnout in 2004.

"We expect to see the turnout down," Sedwill said. "The fact that elections are going ahead is a success for the gradual process of putting down a democratic culture in Afghanistan," he added. "The circumstances are very challenging and we have to recognise that, and recognise that these elections are going to be pretty rough and ready in places."

But he said there would be "many, many more" polling stations than the 4,800 in 2004. He said there would be quiet intimidation by the local insurgency designed to discourage Afghans from voting, and much would depend on whether communities could broker local ceasefires.

Abdul Hadi, election commissioner for Helmand, where 9,000 British troops are deployed, was reported yesterday as saying that the election would take place only in safe areas in the main towns.

Sedwill said that the other areas, mainly in the south of Helmand, were sparsely populated. Operation Panther's Claw, the major offensive involving thousands of British troops, was designed to clear the Taliban from a populated area along the Helmand river and make it safe for people to vote.

British and other Nato troops have faced an increase in the number of Taliban and insurgent attacks in recent weeks and expect an escalation in the run-up to elections. Foreign forces are expected to adopt a low profile on polling day, out of sight of polling stations where their presence could be provocative, officials said.

Asked whether Nato troops, including the British, would be in Afghanistan at the time of the next presidential election, the ambassador replied: "The hope is not to have western troops in a combat role [there] in five years."

Nato and US forces said they had carried out an air strike in southern Afghanistan, but denied allegations by villagers today that the four dead were civilians killed while sleeping.

Angry residents were reported to have brought the bodies to the provincial capital Kandahar to show officials. Villagers identified the dead as civilians – three boys and a man from one family killed late on Tuesday.

The Ministry of Defence tonight named Craftsman Anthony Lombardi, 21, of the Royal Electrical and Mechanical Engineers, as the soldier killed on Tuesday in Babaji, southern Afghanistan. He was driving a Spartan tracked reconnaissance vehicle when it was hit by an explosion.  The force of the explosion breeched the hull, killing him instantly, the MoD said.