"We're in touch, we talk all the time, we've done a lot, we've sent representatives to their sides and they've sent representatives to our side," Mohammad Masoom Stanekzai, secretary of the High Peace Council and a close adviser to President Hamid Karzai, told The New York Times.
In the clearest confirmation of peace talks yet, he said the discussions are "a step beyond" mere talks about talking.
Stanekzai spoke at a news conference announcing $50 million in U.S. aid to the peace council.
"We are all 100 percent behind reintegration and reconciliation," U.S. Ambassador Karl Eikenberry said.
The Taliban have repeatedly denied negotiations with Kabul and demand a full withdrawal of foreign forces first.
"For political reasons the anti-government elements cannot confirm they are ready for talks with the Afghan government," Stanekzai said.
"When we do something, you won't be able to see the results right away. This is a process. It will take some time."
"We are in the front," he added. "The Americans are giving us financial support. If anything beyond that support is required, then their support would be there."