The Taliban statement, posted on the organization's Web site and e-mailed to journalists, blamed a U.S. representative for offering "unacceptable" conditions that contradicted "earlier agreed-upon points," without being specific, the Los Angeles Times reported.
Because of this, the Taliban movement was "compelled to suspend all dialogue with the Americans."
The statement did not refer to recent incidents that led to threats and denunciations from the Taliban -- Sunday's shooting of 16 civilians in Kandahar province, allegedly by a U.S. Army sergeant and the burning of Korans at a U.S. base in February.
Karzai's demand that coalition forces return to major bases and end operations in rural areas does seem to be in response to Sunday's shooting rampage, the Los Angeles Times said. Karzai's office said he conveyed the demands to U.S. Defense Secretary Leon Panetta during his one-day visit Afghanistan.
Karzai also called for accelerating the target date for Afghan forces to assume security duties to the end of 2013, instead of the current plan that calls for withdrawal of coalition troops by the end of 2014.
The soldier accused of the killings in Kandahar province was removed from Afghanistan to Kuwait Thursday, drawing outrage among Afghans, who want him tried in the Afghanistan courts, The New York Times said.
U.S. military officials still haven't identified the suspect, described as a 38-year-old Army staff sergeant out of Joint Base Lewis-McChord in Washington state.
The New York Times quoted Gen. Curtis Scaparrotti, the second in command of U.S. and NATO forces in Afghanistan, as saying Afghan officials had been given prior notice about the soldier's move and that "their response is that they understood."
The general also was quoted as saying the U.S. military likely will not disclose the soldier's name until charges have been filed, adding: "We are conscious of due process."
The Washington Post reported an Army general in the suspect's chain of command would decide whether he would face a court-martial.
Scaparotti also announced the death of an Afghan driver who rammed his stolen pickup truck Wednesday into a fence around the runway of Camp Bastion in Helmand province during the landing of the plane carrying Panetta, who was unharmed in the incident. The Afghan driver died of burns while under medical care.
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