British troops in Afghanistan's volatile Helmand province are preparing to hand control of the city of Lashkar Gah to Afghan security forces.
Nato has already handed over the relatively peaceful province of Bamiyan and the eastern town of Mehter Lam.
But correspondents say that maintaining stability in Lashkar Gah will be the sternest test yet for local forces.
The handover is seen as a critical step in a transition of power before foreign troops end combat operations in 2014.
Nato handed over responsibility for the security of Mehter Lam, the capital of eastern Laghman province, on Tuesday. Mehter Lam is considered to be a relatively secure city, but there were reports of a mortar attack near the city during the handover ceremony.
Seven areas were designated to be passed to local forces under a plan announced by President Hamid Karzai in March. The remaining four areas to be handed over are:
Kabul province
Panjshir province
Herat city
Mazar-e Sharif city
Observers agree that the greatest challenge for Afghan forces is likely to be faced in Lashkar Gah, the capital of Helmand province, where Taliban insurgents remain active.
On Monday, seven policemen were killed at a checkpoint near the city, just outside the area due to be handed over. And on Saturday a British soldier was killed while on a routine patrol in the area - some reports suggest he was shot by a man in an Afghan army uniform.
'Much to do'
There are approximately 10,000 British troops serving in Afghanistan under Nato command and many of them are stationed in Helmand.
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Lashkar Gah
Capital of Afghanistan's volatile southern province of Helmand
Historically called Bost, the city was first founded about 1,000 years ago as a major city in the kingdom of Mahmud of Ghazna
The modern city was built as a headquarters for US engineers working on an irrigation project in the 1950s
The population of Lashkar Gah is 35,900 according to a 2006 central statistics figures
British troops are set to complete their withdrawal from Afghanistan by the end of 2014, but just days ago MPs in the UK criticised this target, saying that pulling troops out prematurely from Afghanistan could "dangerously weaken" the remaining forces.
The Commons Defence Committee also said the plan to withdraw by the end of 2014 could undermine the international coalition's strategy. UK Defence Secretary Liam Fox said that while there was "still much to do", the pull-out target was achievable.
Correspondents say that despite rising casualty numbers, the surge of extra US troops and tens of thousands of new Afghan police and soldiers have improved security in a number of areas in the country.
However, the quality of Afghan police and soldiers is patchy and there are fears that they will be unable to withstand a renewed summer offensive from the Taliban.
Such fears are particularly acute in Helmand because the Afghan police will have a crucial role to play in the transition and there are serious concerns about corruption and low morale in its ranks.
High-profile attacks
Violence has sharply increased across Afghanistan since President Karzai's announcement. Just weeks after he named the areas to be handed over, seven UN staff were killed during a protest in Mazar-e Sharif, one of the cities where Afghan troops are to take over.
There have also been a number of high-profile attacks including an assault on a luxury hotel in Kabul that left 22 people dead. Hours after the first handover ceremony in Bamiyan, militants killed a key presidential aide in a raid on his Kabul home.
At the time of the initial handover announcement, Nato Secretary General Anders Fogh Rasmussen said that every step of the transition would be "determined by conditions on the ground".
After their withdrawal, the primary role of foreign troops will be to train and equip Afghan security forces. Nato troops will cease to engage in battle.
There are currently around 140,000 foreign troops in Afghanistan - nearly 100,000 of whom are from the US - still battling the Taliban insurgency
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