The Afghan government has retreated from a plan to disband all foreign security firms amid intense foreign pressure to reconsider the decision, Press TV reported.
President Hamid Karzai's office said in a Sunday statement that the firms responsible for the protection of embassies and military bases could maintain operations.
"Providing security for embassies, transport of diplomats, diplomatic residences, international forces' bases and depots can continue operation within these limits," the statement read.
Some diplomats and military officials say Karzai has been under intense pressure to reconsider his decision.
The move comes days after notorious American contractor Xe Services LLC, formerly known as Blackwater was awarded a five-year State Department contract worth up to USD 10 billion for operations in Afghanistan.
The company has been struggling with a trail of legal cases and civil lawsuits, including one for killing 17 Iraqi civilians during a Baghdad shootout in 2007.
However, the Afghan government says it will continue dissolving other private security firms without exception as planned.
In August, Karzai ordered all private security firms to end their operations by the end of the year. He has blamed the security guards operating under the foreign firms for civilian deaths.
According to the Afghan government's estimates, around 4,000 armed security guards are working in the country.
The private companies are said to be in charge of providing security for foreign officials and embassies as well as development projects in Afghanistan.
Earlier this year, Karzai called for the foreign security guards to be removed from the streets of Afghanistan over the next few months.
He has accused the security companies of running what he called an economic mafia based on crooked contracts.
Earlier in June, the CIA reportedly admitted that Blackwater had been loading bombs on US drones that target suspected militants in Pakistan.