A former Afghan president has called a White House order to unfreeze $3.5 billion in assets held in the US for families of 9/11 victims “an atrocity” against the Afghan people.
Mr Karzai called the move “unjust and unfair”, saying Afghans had also been victims of Al Qaeda leader Osama bin Laden.
But it was Taliban leader Mullah Mohammad Omar who refused to hand over bin Laden to the US after the 9/11 attacks that killed thousands.
“The people of Afghanistan share the pain of the American people, share the pain of the families and loved ones of those who died, who lost their lives in the tragedy of September 11,” Mr Karzai said.
“We commiserate with them [but] Afghan people are as much victims as those families who lost their lives.
“Withholding money or seizing money from the people of Afghanistan in their name is unjust and unfair and an atrocity against Afghan people.”
The order Mr Biden signed last Friday freed $7bn in Afghan assets held in the US, to be divided between 9/11 victims and humanitarian aid to Afghans.
September 11 victims and their families have legal claims against the Taliban and for the $7bn in the US banking system.
The $3.5bn was set aside for a US court to decide whether it can be used to settle claims by families of 9/11 victims. US courts would also have to sign off before the release of humanitarian money.
Mr Karzai said we “ask the US courts to do the opposite, to return the Afghan money back to the Afghan people”.
“This money does not belong to any government … this money belongs to the people of Afghanistan.”
Meanwhile, Mr Biden’s order calls for the $3.5bn allocated to humanitarian aid to be put into a trust and used to assist Afghans, bypassing their Taliban rulers.
But Mr Karzai demanded that all $7bn be returned to Afghanistan’s central bank to further its monetary policy.
He spoke against giving Afghan reserves to international aid organisations to provide humanitarian aid.
“You give us our own money so that it can be spent for those foreigners who come here, to pay their salaries, to give it to [non-government organisations],” Mr Karzai said.
Afghanistan’s economy is teetering on the brink of collapse after international money stopped flowing into the country with the arrival in mid-August of the Taliban.
Last month, the UN made a $5bn appeal for Afghanistan.
The UN warned that one million children were in danger of starving and 90 per cent of Afghans lived below the poverty level of $1.90 a day.
Mr Karzai was Afghanistan’s first democratically elected president after the US-led coalition ousted the Taliban in 2001.
He served until 2014 when he was succeeded by Ashraf Ghani, who fled the country on August 15, leaving the doors open for the Taliban takeover of Kabul.
Mr Karzai was highly regarded as embracing all of Afghanistan’s many ethnic groups but his administration, like later Afghan governments, was dogged by charges of widespread corruption.
He called on the country’s Taliban rulers and their opponents to find a way to come together.
Mr Karzai lobbied for the traditional Afghan grand council, or loya jirga, as a means to find consensus and establish a more representative administration.
“We, as Afghans, and the current acting Islamic government, must do our best to not give America or any other country any excuse to be against us,” he said.
US State Department spokesman Ned Price tried to clarify Mr Biden's order on Monday.
“Afghan central bank reserves held in Federal reserve are inaccessible for months because of uncertainty regarding who could authorise transactions on the accounts and due to pending litigation by 9/11 victims and other victims of terrorism,” Mr Price said.
He said that as the humanitarian and economic situation in Afghanistan continued to deteriorate, Mr Biden’s executive order is designed to protect the reserves as part of an effort to make $3.5bn available to the Afghan people.
"No decision has been made about how these funds will ultimately be used to benefit the Afghan people, many of whom are also victims of terrorism,” Mr Price said.
“Whatever mechanism is established, it will be designed to minimise the risk that funds end up in the hands of the Taliban or other sanctioned individuals or groups."