"It's very difficult to say where he is hiding. He cannot be away from this region. He's definitely in this region," Karzai told CNN's Late Edition. "We will get him sooner or later, trust me on that."
Pakistan Monday denied a newspaper report that the CIA has set up covert bases in the country's remote tribal regions to hunt for Osama bin Laden and stop him from plotting another attack on the United States.
The report in Monday's New York Times, citing anonymous American officials familiar with the operation, said the CIA had concluded that bin Laden was being sheltered by local tribesmen and foreign militants in northwestern Pakistan, and was suspected of controlling an elite terrorist cell that could be aiming to launch a "spectacular" attack against America.
Speculation on bin Laden's whereabouts has long focused on the mountains along the border between Afghanistan and Pakistan, where the al Qaeda leader slipped away from Afghan and U.S. forces three years ago.
Pakistan's army has mounted a series of bloody offensives against foreign fighters near the border this year, and American forces launched a winter-long operation last week against Taliban rebels on the Afghan side.
But there has been no indication they are close to seizing the suspected mastermind of the Sept. 11, 2001, attacks in the United States which prompted President Bush to launch an assault on Afghanistan.
Pressed in the CNN interview, recorded Sunday in the Afghan capital, Karzai declined to say whether bin Laden could be in Afghanistan, or in Pakistan. He said he knew of no suggestion the al Qaeda leader could be in neighboring Iran.
"But we can definitely say he's around this region and he can't run forever," Karzai said.
Even though bin Laden remains at large, and Taliban militants continue to kill Afghan and U.S. soldiers despite an offer of amnesty, Karzai has said he is more alarmed at Afghanistan's booming narcotics industry, which the United Nations says is turning it into a "narco-state."
On Sunday, Afghan judges and prosecutors began training for special courts that officials hope will begin jailing heroin and opium kingpins early next year.
U.S. and British counter-narcotics experts are training Afghan security forces who have already begun destroying drug stockpiles, smashing refining laboratories and arresting traffickers.
Opium poppy crops also are to be destroyed in key growing regions early next year. Meanwhile, hundreds of millions of dollars are earmarked to help farmers switch to less lucrative but legal crops.
Karzai said Afghans were "embarrassed" to be the world's biggest suppliers of opium and heroin.
"I promise you, and I like that American people and the rest of the world should know this, that we will fight poppy," he said. "We know it hurts us, it hurts you, it hurts everybody."
Karzai, who triumphed in landmark October elections, said he hoped Iraqis, due to vote for lawmakers on Jan. 30, would follow the example of Afghans, who turned out in force to cast ballots despite the threat of militant violence.
On Monday, officials repeated Pakistan's contention that they have no evidence that the al Qaeda leader is inside the country, and denied the Times report that the CIA had set up small bases on its soil near the Afghan border in late 2003.
"There are no CIA cells in Pakistan ... in our tribal areas, and there is absolutely no truth in this New York Times report," said army spokesman Maj. Gen. Shaukat Sultan.
Both U.S. and Pakistani generals have said the trail in the hunt for bin Laden has gone cold.