(Reuters) - Afghanistan faces funding cuts and tighter restrictions on vital aid from an international donor conference this week, marking further challenges for a nation torn by two decades of war and now ravaged by COVID-19.Ministers from about 70 countries and officials of humanitarian organisations, at the virtual conference hosted in Geneva on Monday and Tuesday, are expected to pledge billions of dollars to safeguard development projects, with talks between the Afghan government and Taliban rebels stalled and President Trump sharply reducing U.S. forces in the country. Although the fragile economy depends heavily on foreign aid, Kabul will see cuts in donations, and donors will introduce stringent political and human rights conditions on the money, five participants told Reuters. Afghanistan’s economy is set to contract by at least 5.5%this year because of COVID-19 impacts, stated the World Bank in a recent report. The strategy aims to protect the peace talks and prod the Afghan government to improve allocation, they said. Donors at the last conference, in Brussels in 2016, pledged $15.2 billion for 2017 to 2020, or $3.8 billion a year.That could be cut by 15% to 20%, said a senior Western diplomat participating in the conference. “This is the best countries can offer amid the domestic challenge of managing a pandemic.” Trump will cut U.S. forces in Afghanistan to 2,500 from 4,500 by mid-January, the Pentagon said last week, seeking to wind down America’s longest war. The drawdown of foreign forces - Britain plans to follow the U.S. lead - could mean greater influence for the Taliban. This makes donors uneasy over whether the hardline Islamists will try to roll back progress on human rights and girls’ education. The peace talks in the Qatari capital Doha have stalled and the Taliban refuses to call a ceasefire. Its attacks have sometimes prompted U.S. airstrikes to protect urban areas. But senior diplomats told Reuters that a breakthrough was expected in the peace talks after the donor conference.“Taliban and Afghan government representatives will take a break from the peace talks after the Geneva conference but not before they have joint declaration of agreement over key security issues,” said a senior Western official. At the Geneva meeting, the government of Afghan President Ashraf Ghani will present a peace and development framework meant to allocate funds to key projects, safeguard millions of jobs and protect democratic institutions. “The conference will remain focused on making Afghanistan self-reliant by the end of its transformation decade which is 2024,” Naser Sidiqee, a senior official of the Afghan finance ministry, said in Geneva last week. The Taliban is not invited to the conference but the militants have urged donors to continue their humanitarian assistance while accusing Ghani’s government of pocketing the aid money. “We request the international community and organisations to deliver aid, collected in the name of the people, to the people,” the Islamist group said in a statement.