Western officials warned Mr. Karzai in the Sunday meeting that the cash these development organizations manage will not start flowing directly to the Afghan government if they leave, said people familiar with the discussion.
Some officials are worried that Mr. Karzai, whose government is fraught with corruption, is planning to get control of more of the aid money if these groups leave the country.
Mr. Karzai said he plans to move ahead with the private-security ban, which he outlined in August, setting a four-month implementation deadline. "The government of Afghanistan is [determined] to disband the private security companies and therefore asks our international partners for practical and sincere cooperation," Mr. Karzai said Sunday's meeting, according to a statement from his office.
The Afghan president has accused private security companies of causing civilian casualties and of corruption. He asked the international delegation that visited him Sunday to provide a list of the big development projects that need security, according to the statement.
"This is a non-starter," said a Western official familiar with Sunday's meeting. "Trying to select or single out individual projects is not a solution… The decree will have fairly catastrophic consequences for development and progress in Afghanistan."
The U.S.'s commander of coalition forces, Gen. David Petraeus, met with Mr. Karzai Sunday, as did the top United Nations representative to Afghanistan, Steffan di Mistura, and the U.S. ambassador to Kabul, Karl Eikenberry, among others.
Although the international delegation expressed their support for Mr. Karzai's ban, they asked that exceptions be made for aid and development groups. U.S. government and NATO officials concede that using private security firms isn't optimal, either.
Still, doubts remain about whether Afghan security forces can step in to fill the gap that the ban will create. They are already stretched thin, battling an insurgency that is proving resilient and spreading throughout the country.
This year has been the deadliest for NATO forces since the start of the nine-year war, with at least 599 soldiers killed so far, according to icasualties.org, an independent monitoring group.
Afghanistan's ministry of interior says its forces are capable of keeping aid organizations secure and will provide police from a special department to protect these groups for a fee, said Zemarai Besharay, the ministry's spokesman.
"Why not have the money paid to private security companies go to the ministry of interior?" Mr. Besharay said.
The ministry's plan is adding to concern among Western officials that the Afghan government is hoping that the ban on private security companies will be lucrative for the government. Western officials have told the government that the money the organizations spend on private security companies won't be directed to the Afghan police.
Spokesmen for Mr. Karzai couldn't be reached for comment Sunday.
In a separate development, four insurgents dressed in police and women's clothing stormed a U.N. compound in western Herat province, killing at least two Afghan security guards but failing to kill or injure any of the international aid workers, according to a U.N. statement.
The insurgents blew up a car packed with explosives, blowing open the gate to the U.N. compound before the insurgents entered the building. The Afghan police responded to the attack and fought off insurgents.
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