BRUSSELS (Reuters) - The US special envoy for Afghanistan and Pakistan urged the European Union on Tuesday to provide more humanitarian assistance to refugees who have fled fighting between Pakistan Army and Taliban. The American diplomat also declared war on the Talibans bankrollers, announcing a campaign to interdict hundreds of millions of dollars of foreign funds flowing into the militants coffers each year, according to The Times. The European Commission said last month it would provide $27.7 million to help people from the Swat Valley combat zone and ask EU states to provide a further 45 million euros from a reserve fund. But Richard Holbrooke, who has just visited Afghanistan and Pakistan, told reporters after talks with EU and Nato officials: The EU membership countries should in my view do more to help Pakistan with this enormous refugee crisis. I would like to see more support from the EU. The US has given for the refugees alone $330m. The EU, I hope, would step up to the plate and do an equal amount or more, he said in Brussels. Right now, I would say, refugee relief assistance in the reconstruction phase in Pakistan is the most urgent issue, Holbrooke said at Nato headquarters in Brussels. Hundreds of thousands of people have fled the combat zone since fighting broke out in late April. Holbrooke stressed that the crisis was in a region containing active Al-Qaeda and Taliban fighters. This is more than a humanitarian crisis, he said. This is a strategic issue as well, because those refugees are in the exact area where Al-Qaeda and the Taliban are and its right up against the Afghan border. In order to succeed in Afghanistan we have to have some degree of stability and control on the Pakistan side of the border, he said, following talks here with Nato, EU and Belgian government officials. Holbrooke expressed continuing US frustration about the unwillingness of some EU countries to do more in Afghanistan as part of a coalition of more than 40 states, but added: We are not here in this administration ... going to repeat the fruitless, unproductive drama of coming to this city every year and banging on about issues or restrictions and troop levels. We hope that the amount of support will increase as time goes forward because we are all in this together and every country represented in the coalition is a potential target, not the least of which is the city that houses the Nato headquarters, he said in reference to the Belgian capital. He said the US is setting up a task force to investigate how money is reaching insurgents in Afghanistan, much of it from within the Gulf states. This is a huge problem, and we are forming up a task force to work on this in which Treasury (Department) will take the lead, he said. He said the Pentagon, the US Federal Bureau of Investigation (FBI) and other relevant agencies would be involved. While he would not mention any figures, Holbrooke said: More money is coming from the Gulf than is coming from the drug trade to the Taliban. Holbrooke said the money is coming in from sympathisers all over the world, with the bulk of it appearing to come from the Gulf, although he said there was no evidence that governments were bankrolling the efforts. There are a lot of ways that money flows. People carry it in suitcases, he said. Money is probably coming from sympathisers in western Europe as well. Its such a daunting issue, he added. Holbrooke said he believed the Taliban movement was using drug money to fund fighting in the so-called Pashtun belt, but that the wider insurgency effort was being financed from outside. Our Monitoring Desk adds: Top American and British officials on Tuesday called for the inclusion of Taliban fighters who renounce extremism in Afghanistans political life. US envoy Richard Holbrooke told the BBC the integration of such people had been neglected. UK Foreign Secretary David Miliband said including moderate Taliban members in dialogue could help stability. Holbrooke said that the Taliban were 'under intense pressure, with their funding sources seriously undermined. But he said a new priority was bringing more Taliban fighters into the political process. There is room in Afghan society for all those fighting with the Taliban who renounce Al-Qaeda and its extremist allies, who lay down their arms and who participate in the political life of the country, he said. The leading presidential candidates all agreed that this was an area that had been neglected, he said. His remarks echoed those of Miliband, speaking at Nato headquarters in Brussels. The Afghan government had to develop effective grass-roots initiatives to offer an alternative to fight or flight to the foot soldiers of the insurgency, he said. A distinction needed to be made, he said, between 'hardline ideologues who must be defeated and those who could be 'drawn into a political process. Essentially this means a clear route for former insurgents to return to their villages and go back to farming their land, or a role for some of them within the legitimate security forces, he said.