Brussels -- NATO defense ministers meet on Thursday and Friday amid concerns that a "Vietnam Syndrome" may undermine the alliance's efforts in Afghanistan.

The talks in Budapest come just days after the departing commander of the British forces in Afghanistan, Brigadier Mark Carleton-Smith, warned that NATO would never defeat the Taliban.

Rather than aim for an impossible victory, the brigadier said, NATO should try to reduce the insurgency to "a manageable level" and negotiate with willing Taliban tribal leaders.

US Defense Secretary Robert Gates, whose country is the biggest contributor to NATO's International Security Assistance Force (ISAF) in Afghanistan, has called on allies not to be defeatist.

And while all member states agree that victory in Afghanistan will not be achieved by military means alone, Gates is expected to urge his colleagues in Budapest to boost their contributions to the mission.

The ISAF currently has a force of 50,700 soldiers, up from about 45,000 six months ago. And the German parliament has just agreed to increase its contribution by 1,000 soldiers, raising the total to 4,500.

But a bigger ISAF has so far failed to produced the desired results, with Taliban violence in the country rising to its highest level in years.

General David McKiernan, the top US commander in Afghanistan, added to the gloom by warning ahead of the meeting in Budapest that things "might get worse before they can get better."

General John Craddock, the Supreme Allied Commander of NATO forces in Europe, says one sure way of undermining the Taliban is to go after the country's flourishing opium trade, whose money finances the insurgency.

Craddock wants to use soldiers to bust heroine laboratories and go after drugs lords.

"There is a close link between drugs and the insurgency. This is something we cannot afford not to do," one NATO diplomat said Tuesday.

But some allies -- among them Germany, Spain and Italy -- remain skeptical, arguing that such a task should be left to the Afghan police forces.

One possible solution on the table in Budapest is to allow unwilling nations to opt out of Craddock's request.

The second day of the Budapest meeting coincides with the expiry of a deadline for the withdrawal of Russian troops from core Georgia.

And while there are signs that Russia is indeed complying with a deal brokered on September 8 by French President Nicolas Sarkozy, NATO diplomats say defense ministers are not expected to call for a return to "business as usual" with Russia just yet.

At the same time, they are to meet Georgian officials on Friday to advance discussions on how they can help the country recover from the August conflict. Georgia has joined NATO's Partnership for Peace program and his hoping to become a full member of the alliance despite strong opposition from Moscow.

While NATO has agreed to provide advice to the country's military, officials in Brussels stress that it will not be giving it any weapons.

Much of the discussions in Budapest will revolve around ways to boost NATO's capabilities at a time of economic slowdown.

Officials say the financial crisis should encourage member states to make a better use of their defense budgets.

"The pressure on national budgets will only grow as a result of the current financial crisis. Which means finding efficiencies across government spending will become ever more important," said NATO spokesman James Appathurai.

One area of collaboration that is often cited in this context is a French-British initiative to address the alliance's chronic shortage of helicopters through a common fund.

Another is an agreement by 12 NATO countries to jointly purchase three C-17 airlifters. The aircraft will be based at the Papa air base in Hungary.

In Budapest, ministers are also set to agree to increase the alliance's target for deployable troops, from 40 percent to 50 percent of member states' forces. The move comes despite resistance from Turkey, Poland and the Baltic nations, which all say they need more troops to defend their own territory.

One final issue up for discussion in Budapest will be ways to improve NATO's decision-making process by eliminating unnecessary committees and giving Secretary General Jaap de Hoop Scheffer a freer hand.

Nicholas Rigillo/ DPA/Expatica