"The delayed operation in Kandahar promises dire consequences for the civilian population."
Violence in southern Afghanistan has increased in recent weeks, with 12 Nato troops killed in the south last week, and four Afghan police officers killed in a bombing on Monday.
The report also criticised Nato's growing use of local defence forces.
"The use of local defence initiatives and arbakai [tribal militias]... continues to undermine the government's claim to a 'monopoly on violence' and fracture the security landscape," the report said.
General David Petraeus, the commander of US and Nato forces in Afghanistan, plans to create 10,000 "community police" officers in villages across the country.
Hamid Karzai, the Afghan president, has long been critical of the local defence programmes, for fear they would operate outside the government's control. He reluctantly agreed to Petraeus' plan last week.
Previous experiments with local militias have not ended well. Earlier this year, Nato encouraged members of the Shinwari tribe to take up arms against the Taliban, a scheme which eventually led to tribal infighting that killed more than a dozen people.