(Reuters) - The Obama administration is 'nowhere near' deciding to pull out all troops from Afghanistan at the end of 2014, a top U.S official said on Tuesday, despite mounting frustration President Hamid Karzai has not signed a security deal allowing the military to remain there after next year.

"I have no doubt that the (bilateral security agreement with Afghanistan ultimately will be concluded," Ambassador James Dobbins, U.S Special Representative for Afghanistan and Pakistan, told the U.S Senate Foreign Relations Committee.

While Dobbins said that an ongoing delay to finalizing the deal - which U.S officials had hoped Karzai would sign weeks ago - would impose "damages and costs" on Afghans, he said the Obama administration was not on the verge of abandoning its effort to extend its troop presence.

"We're nowhere near a decision that would involve our departing Afghanistan altogether," he said.

The administration has been urging Karzai to sign the bilateral security agreement (BSA) it negotiated with Karzai's government, which would permit it to keep troops in Afghanistan beyond the end of 2014 to support Afghan forces and conduct limited counterterrorism activities.

After Afghan elders and politicians endorsed the pact last month, Karzai surprised Washington by introducing new conditions for his signature.

If no deal can be finalized, Washington says it will withdraw its entire force of 47,000 troops in a little over a year. Other NATO nations are likely to follow suit.

The absence of foreign troops would likely dampen donor nations' willingness to fund Afghan troops and provide civilian aid.

"My judgment is no troops, no aid, or almost no aid," Dobbins said. If security conditions were to worsen sharply, he said, United States could conceivably even close its embassy in Kabul.

There are fears that the Taliban and other militants ultimately could regain strength, the central government could founder, and Afghanistan be plunged anew into civil war.

The possibility of a full withdrawal of foreign forces is already having a dangerous impact on Afghanistan, Dobbins said, as people pull money out of the country, property prices fall and the Afghan currency slips in value.

Larry Sampler, a senior official at the U.S Agency for International Development, told senators that it would be more difficult to find ways to carry out promised civilian assistance for impoverished Afghanistan without a security deal and a foreign troop presence.

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