More than a decade since the Sept. 11 terror attacks and the start of the Afghan war, the U.S. and its allies have reversed violent trends in much of the country and the transition to Afghan security taking the lead has begun in seven key areas, including major cities such as Kabul and Herat.
"Security gains during (the past six months) have provided a firm foundation for the transition of security responsibilities to the Afghan government" and its security forces, the report said.
However, cross-border attacks have increased in recent months due to insurgents' safe havens in Pakistan and the support they received from within its borders.
"The insurgency remains resilient and, enabled by Pakistani safe havens, continues to contest" Afghan security forces throughout the country, especially in the east, the report said.
The Pentagon sent the semi-annual report to Congress, and The Associated Press obtained a copy from congressional officials.
The Unites States has some 100,000 troops in Afghanistan and plans to bring most forces home by the end of 2014. President Barack Obama announced this past summer that 10,000 troops will be redeployed by the end of the year. The 33,000 troops that Obama sent as a surge force will be out by the end of September 2012, leaving about 68,000 troops.
"Transition remains on track with no demonstrated effort by the insurgency to target the process," the report said.
The latest progress report - the last one was in April - strikes a more critical tone than previous Pentagon reports about Pakistan's failure to crack down on insurgent safe havens along the border with Afghanistan, arguing that these havens enable militants considered the greatest threat to American troops.
The report said the relationship between Afghanistan and Pakistan had improved early on, but several events severely strained the ties. Most notably was the May 2 U.S. raid deep inside Pakistan that led to the death of al-Qaida leader Osama bin Laden.
Cross-border attacks diminished in August, but high-profile attacks in September, including the assault on the U.S. embassy in Kabul, were a significant setback.
The report said these attacks "were carried out by the Haqqani network and directly enabled by Pakistani safe haven and support."
The United States in recent weeks has stepped up criticism of Pakistan and its counterterrorism cooperation but has at the same time sought to cajole the increasingly angry and resistant Pakistanis into doing more. As tensions rose between Washington and Islambad, Secretary of State Hillary Rodham Clinton delivered an unusually blunt warning to the Pakistanis, saying during a visit to Kabul last week that they "must be part of the solution" to the Afghan conflict.
Clinton said the Obama administration expects the Pakistani government, military and intelligence services to "take the lead" in not only fighting insurgents based in Pakistan but also in encouraging Afghan militants to reconcile with Afghan society. She said the U.S. would go it alone if Pakistan chose not to heed the call.
After leaving Kabul, Clinton made the same points to Pakistani officials in Islamabad, where she led a high-level U.S. team, including CIA director David Petraeus, seeking to repair badly strained ties. Those meetings appear to have dulled the intensity of Pakistan's anger but there has not yet been any clear sign that the crisis is over.
Clinton told a congressional committee on Thursday that while the administration has reached out to the Taliban-linked Haqqani network, it is also pressuring Pakistan to do more to crack down on the militant group.
Last month, then-Joint Chiefs of Staff Chairman Adm. Mike Mullen said the Haqqani network, which is affiliated with the Taliban and al-Qaida, "acts as a veritable arm" of Pakistan's intelligence agency. Mullen accused the network of staging an attack against the U.S. Embassy and NATO headquarters in Kabul on Sept. 13 as well as a truck bombing that wounded 77 American soldiers. He claimed Pakistan's spy agency helped the group.
The report identified chronic problems with the Afghan government, including widespread corruption, delays in reforms and political disputes.
Associated Press reporter Matthew Lee contributed to this story.