* Up to 95 pct of compensation paid in three districts
* Govt report of ${esc.dollar}100 million damage "exaggerated"-ISAF (Adds comments)
KABUL, Jan 14 (Reuters) - Foreign troops in Afghanistan have paid out ${esc.dollar}1.4 million to Afghans in the past two months for damages in the country's south, where they have been waging a stepped-up military campaign, NATO-led forces said on Friday.
General James Terry, commander for southern Afghanistan, said that since Nov. 2 more than 800 claims for compensation had been made and that more than half of those had been settled.
Tens of thousands of foreign and Afghan troops are deployed in Kandahar in a bid to regain the upper hand, as violence hits a peak across the country. Both civilian and military casualties are at their highest since the 2001 overthrow of the Taliban.
Most compensation went to three districts of Kandahar province, where Afghan and foreign forces are fighting a bitter battle for control of Taliban strongholds, a regional spokesman for the International Security Assistance Force (ISAF) said.
"The majority (of payments) are in Kandahar, mostly in the districts of Arghandab, Zhari and Panjwai," said Lt. Col Webster Wright, public affairs officer for regional command south.
"Those three districts are probably accounting for 90 to 95 percent of that (${esc.dollar}1.4 million)," he said.
Wright said much of the cash was to cover farmers for up to three years of harvest from destroyed orchards and vineyards that would take time to grow fruit after being replanted.
But he dismissed an Afghan government report of ${esc.dollar}100 million damage to fruit crops and homes in the area as exaggerated, and said many of the buildings destroyed were abandoned or used for agricultural purposes rather than as houses.
Wright said the compensation covered only about 80 buildings that had been homes.
The government delegation, led by President Hamid Karzai's adviser, Mohammad Sadiq Aziz, said Afghan and foreign forces caused unreasonable damage to homes and orchards, just as the harvest was about to begin, and displaced people. [ID:nSGE70A0A1]
ISAF on Friday also issued a statement quoting Kandahar officials condemning the report as "extremely exaggerated".
"Claims by the residents are taken very seriously," Terry said in the statement, which contained the ${esc.dollar}1.4 million figure. "If we damage something, it is our obligation and responsibility to compensate for it." In Friday's ISAF statement, Kandahar Governor Toryalai Weesa and district leaders described as "exaggerated" the government report's finding about the cost of the damage in the districts of Arghandab, Zhari, and Panjwai.
"It has been extremely exaggerated. From one house, five people asked for the same compensation," said Zhari district leader Niaz Mohammad Sarhadi.
In November, the Afghan Rights Monitor (ARM), an independent human rights group, reported widespread damage to hundreds of houses in the same three districts, home to about 300,000 of the province's more than one million inhabitants. [ID:nSGE6A30DA]
It said foreign forces had used aerial bombing to strike Taliban strongholds and to set off mines and homemade bombs, sometimes hidden as booby-traps in private homes.
Terry said ISAF only destroyed vacant buildings used to store explosives or manufacture bombs. (Reporting by Michelle Nichols and Emma Graham-Harrison, editing by Yoko Nishikawa) (If you have a query or comment about this story, send an e-mail to news.feedback.asia@thomsonreuters.com)
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