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Being attended by approximately 800 VIPs including foreign dignitaries and Afghan legislators, the ceremony began with recitation from the Holy Quran just before noon. The recitation was followed by Afghanistan's national anthem.

Hours earlier, Karzai had meetings with US Secretary of State Hillary Clinton, Pakistan President Asif Ali Zardari and Japanese prime minister's special envoy to Afghanistan Teti sero Phocopoma.

In his speech, Karzai is expected to touch on the challenges facing the war-torn country such as terrorism, reconstruction, good governance, the rule of law and respect for constitutionalism.

Soon after her arrival in Kabul, Clinton said: "There is now a clear window of opportunity for President Karzai and his government to make a new compact with the people of Afghanistan, to demonstrate clearly that you're going to have accountability and tangible results that will improve the lives of the people."

Speaking at the US Embassy, she observed: "We stand at a critical moment on the eve of the inauguration of President Karzais second term We want to be a strong partner with the government and the people of Afghanistan.  And I always say both because its not either/or. It has to be both. 

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