As thousands of Canadian, U.S., British and Afghan troops prepare for a summer offensive in Kandahar - expected to be the most decisive battle in the Afghan war - the Taliban are already preparing their battleground, planting mines, hiding weapons and terrifying the local population.

Kandahar city may be a ramshackle, mud-brick metropolis of 500,000 people, but it is the spiritual home of the Taliban and has always been the Afghan insurgency's centre of gravity. The insurgents will not give up the city or the area without a fight.

"The Taliban are in control in Kandahar and the areas geographically adjacent to Kandahar city. They control it completely," said Hy Rothstein, a retired U.S. Special Forces Colonel who teaches at the U.S. Navy's Postgraduate School in Monterey, California.

"Those areas are fortified. There are IED belts (improvised explosive devices) and a population that is not going to provide the type of information the coalition needs in any serious way because the Taliban remain and their shadow government remains strong.

"The Taliban are going to snipe at us, literally and figuratively. They are going to try to increase the cost of doing business. They can do that at their will, because they can hit us anywhere they want, when they choose. We might be able to hit back hard, but they still control the pace of what goes on, not us. So they really hold the upper hand."

Operations to prepare for the coming war in Kandahar started late last winter as special forces began to kill and capture suspected Taliban leaders in night raids.

Acting on intelligence and tracking suspects in a war of attrition, commando squads have fanned out through the mud-hut villages surrounding Kandahar to identify, isolate and remove local insurgent leaders.

In four months, they have eliminated up to 70 mid-level commanders in a bid to weaken the Taliban and choke off their supply routes.

Taliban insurgents are striking back, infiltrating new fighters into Kandahar from Pakistan, stepping up bomb and suicide attacks and launching an assassination campaign that targets Afghan bureaucrats, policemen, aid workers and tribal elders.

They have murdered Kandahar's deputy mayor as he prayed in a mosque; launched a suicide bomb attack on the Kandahar headquarters of the Afghan intelligence service; assassinated the office manager of Kandahar's Sarposa prison as he drove to work and sprinkled death threats like poppy seeds all around the province.

Recent visitors to Kandahar say the city is overwhelmed with anxiety. Residents fear being caught up in the NATO offensive and are worried by rumours Taliban leaders in Pakistan have drawn up "kill lists" of people marked for death.

The United Nations recently shut its Kandahar office and removed foreign staff from the city because of the surge in violence.

Last weekend, a handful of Taliban fighters launched an unprecedented rocket and ground attack against Kandahar Air Field, NATO's largest installation in southern Afghanistan and home to more than 2,000 Canadian troops.

On Wednesday, they exploded a large car bomb outside Canada's Provincial Reconstruction Team base at Camp Nathan Smith in Kandahar.

Experts believe the Taliban's show of force is a statement to the Afghan people before 23,000 NATO troops descend on Kandahar for the upcoming offensive that could start any day.

"What's up for grabs here is how we actually define victory or success in Afghanistan," said Brian Katulis of the Center for American Progress in Washington. "It's not simply about gauging progress in Afghanistan - it's actually defining what progress actually means."

Lying at the junction of historic silk trade routes that also served as infiltration routes for mujahedeen who defeated the former Soviet Union, Kandahar was a symbol of Afghan resistance long before Mullah Mohammad Omar organized the Taliban there 16 years ago.

Since the Taliban were driven from power in the aftermath of the September 11, 2001 terror attacks on Washington and New York, Kandahar has remained a wild, untamed place with little security, virtually no government and a strong, lingering, Taliban presence.

It's unlikely the coming battle will degenerate into street-to-street fighting inside Kandahar, because NATO forces want to avoid alienating residents by accidentally killing innocent civilians.

"The Taliban are in the city, but they aren't able to mount a large force," said Brian MacDonald, a retired Colonel and senior defence analyst with Canada's Conference of Defence Associations. "They are able to mount IED attacks or a bomb attack, but they haven't been involved in heavy unit firefights in the city.

"Still, we could see an awful lot of special forces operations against them."

Turning the tide in Kandahar is critical to NATO's plans to weaken the Taliban and push the war to a point where Afghan insurgents might accept some form of peace talks.

Two months ago, when Pentagon planners produced an 80-page unclassified primer on Kandahar, they concluded, "Of all the districts and cities in Afghanistan none is more important to the future of the Afghan government or the Taliban insurgency than Kandahar city."

The coming offensive will be a crucial test of the new counterinsurgency strategy U.S. President Barack Obama unveiled last December, ordering 30,000 more troops to Afghanistan and setting a target date of July 2011 to begin bringing them home.

NATO's objective is to target the Taliban insurgency; secure key population centres; restore credible government services and train competent Afghan security forces to police and hold Kandahar.

The offensive's "shape, clear, hold, build and transfer" counterinsurgency plan was originally refined in Iraq. It calls for NATO troops to maintain a low profile inside Kandahar city itself by handing control to Afghan army and police units.

NATO troops will focus on driving the Taliban out of safe havens on the outskirts of Kandahar, especially in the districts around Arghandab, Zhari and Panjwaii, while moving to stabilize and protect rural areas around the provincial capital.

Unlike a more traditional military offensive to re-take the town of Marjah in neighbouring Helmand province in February, when thousands of U.S. Marines staged an assault in helicopters and armoured vehicles, the Kandahar operation calls for a slow, steady strangulation of the Taliban.

That is supposed to be accompanied by a "civilian surge" that seeks to improve and expand the influence of the Afghanistan government.

Some military commanders no longer talk about an "offensive" in Kandahar, but refer instead to "a rising tide" that stresses development instead of combat.

"There will be no D-Day in Kandahar," Anders Fogh Rasmussen, NATO's secretary general, said this week.

NATO's counterinsurgency plan calls for wooing local tribal leaders in and around Kandahar, while building up and supporting the administration of Tooryalai Wesa, Kandahar's governor, an agricultural expert and former academic at the Asian Studies Centre at the University of British Columbia.

Most Afghans in Kandahar fear the coming NATO offensive threatens to catch them in the crossfire and few put much faith in the Afghan government, President Hamid Karzai or his scandal-plagued half-brother Ahmed Wali Karzi, who heads Kandahar's provincial council.

"What is putting wind in the Taliban's sail is the utterly corrupt and inept Karzai regime," said Mr. Rothstein, who just visited Afghanistan. "The complete utter, illegitimate, corrupt and dysfunctional nature of the Karzai government has given the Taliban something to rally forces around."

The Afghan government's inability to deliver even the most basic services to its citizens may be the weakest link in the Kandahar counterinsurgency.

When NATO troops seized control of Marjah in February, they had hoped to offer residents a "government in a box," by rapidly transitioning from combat to development with teams of Afghan officials brought in to administer a wide range of economic development and security programs.

It hasn't worked out that way.

Combat operations ended in February, but the government in Kabul has failed to dispatch enough administrators or trained police and the Taliban are waging a new campaign of terror and intimidation against anyone who collaborates with NATO.

Tribal elders have been beheaded, farmers who installed new irrigation pumps as part of a redevelopment program have been murdered and schools have been burned down.

In Kandahar, the counterinsurgency campaign is being re-calibrated to incorporate some of the lessons learned in Marjah.

"In a counterinsurgency campaign of this type it is important during the preparation phase to make sure that not just your forces are lined up but that the logistics are lined up and the civil support mechanism are also lined up," said James Dubik, a retired Lieutenant General in the U.S. Army and senior fellow at the Institute for the Study of War. "Once you do a clearing operation and clear insurgents out, you need to have the right set of civil capabilities - the governance and reconstruction - so that citizens can see that their life is at least in some measure ‘better'.

"That is a lot harder to line up than tanks and artillery."