Karzai also demanded on Tuesday an immediate end to foreign troops searching people's homes without his government's authorisation.
"I don't think there is a big need for military activity in Afghanistan anymore," he said in Kabul. "The nature of the war on terrorism in Afghanistan has changed now.
"No coalition forces should go to Afghan homes without the authorisation of the Afghan government ... . The use of air power is something that may not be very effective now."
As part of a new approach, Karzai said foreign governments should "concentrate on where terrorists are trained, on their bases, on the supply to them, on the money coming to them" - a veiled reference to alleged support that the insurgents get from neighbouring Pakistan.
"That's what I mean by a change in strategy," he said. Afghan officials have repeatedly accused Pakistan of aiding Taliban and other insurgent groups, a charge Islamabad vehemently denies.
Karzai's comments came amid the biggest resurgence in Taliban violence since their government was ousted in 2001.
Karzai: US-led forces should not
search homes without go-ahead
More than 1200 people have been killed in the past six months - many of them suspected rebels slain in US air strikes, according to information from Afghan and US officials.
The country held legislative elections on Sunday, the final step toward democracy on a path laid out in 2001.
Just hours before Karzai spoke, coalition commander Lieutenant-General Karl Eikenberry warned that he expected "more fighting in the weeks ahead".
"We are staying on the offensive against the enemies of Afghanistan, and we will continue that process throughout the fall and throughout the winter," Eikenberry said.
Karzai played down the threat. "We do not think a serious terrorist challenge is emanating from Afghanistan," he said.
Karzai did not specify whether he was referring to a threat from al-Qaida or Taliban or both.