"We used the term stalemate a year ago and, relatively speaking, it has not changed much", he told a security forum.
Earlier this month, the U.S. government's ombudsman for the American effort in Afghanistan issued a report that said the Taliban have strengthened their grip on the country over the past three years, with the Afghan government in Kabul controlling only about 56% of the country - down from 72% in 2015.
He said the US believes the Taliban knows "that "at some point" it has to reconcile".
The former United States ambassador to Kabul has been spearheading American efforts to convince the Taliban to negotiate with the Afghan government.
Peace efforts have accelerated since Khalilzad's appointment as Washington's peace envoy to Afghanistan aimed at eventually winding down America's longest war.
The government forces in crackdown against militants, launched well-coordinated offensives against Taliban in Chakhat Payen area of Ashkamesh district in the northern Takhar province early Saturday and besides recapturing several villages also killed five militants forcing the militant group to flee the area, provincial police spokesman Abdul Khalil Asir said.
In October, Pakistan released one of the co-founders of the Taliban and another high-ranking commander.
The second Taliban-US meeting in as many months come as the militants step up attacks on beleaguered Afghan security forces, which are suffering an unprecedented level of casualties.
At the request of the United States, a Taliban office was established in Doha in 2013 to facilitate peace talks but it was shut shortly after opening when it came under pressure over a flag hung outside the premises, the same flag that was flown during the Taliban rule in Afghanistan. "This clearly proves that both sides are exercising patience and caution during their diplomatic engagement", a USA official said on condition of anonymity.
US President Donald Trump had harshly criticised the 2014 prisoner exchange and in a speech last August pledged to send in additional troops and redouble efforts to defeat the Taliban. Progress toward reconciliation with the Taliban also as scant.
Former US Ambassador to Afghanistan Zalmay Khalilzad was recently named the State Department's special representative for Afghanistan reconciliation and has traveled repeatedly to the region for discussions with national governments and the Taliban to try to jump-start a dialogue. That deadline coincides with the date set for Afghan presidential elections.