By 2008 around 1,000 Australian troops are expected to be stationed in the country including 300 special force personnel, largely based in the troubled Uruzgan province of southern Afghanistan.
"We're not losing the war but we will not win it without renewed and increased effort," the prime minister said at a press conference.
Last year saw some of the bloodiest fighting since coalition forces entered the country in 2001 with a rise in insurgency violence and troop fatalities.
"We have done this against the background of deterioration in the security environment in southern Afghanistan," Mr Howard said.
Speaking about the deployment of around 300 special force personnel Mr Howard said: "Their role will be to enhance provincial security by disrupting Taliban command, control supply routes and they will directly support the Australian reconstruction task force."
However the Australian leader made it clear that due to the "heightened security risk" casualties should be expected.
"There is the distinct possibility of casualties, and that should be understood and prepared for by the Australian public," he stressed.
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