TRIESTE, Italy (Reuters) - US envoy to Pakistan and Afghanistan Richard Holbrooke has said it is too soon for Pakistan to declare victory in its Swat Valley, where the Army has driven back Taliban insurgents. Holbrooke, attending a G8 conference on stabilising Pakistan and Afghanistan in Italy, told Reuters that it was too early for Pakistan to announce victory in Swat. The true test is when the refugees go back to Swat. Will they have security? Will they be protected? he said. Will the Army be able to keep the Taliban from coming back down over the hills? And the bill for reconstruction in Swat is going to be enormous - over a billion dollars, maybe over 2 billion. Were very gratified that the Army led the charge back into Swat and that theyve driven the militants out of the Swat Valley. But we have a long way to go before we know the end of the story. So there is a lot left in this saga, he maintained When asked 'is there a number on how many civilians were killed in Swat, Holbrooke flatly replied No. Responding to another question that would there be more casualties after hike in US troops in Afghanistan, he said I dont know if the increased troops will lead to increase casualties. It happens often, but Im not going to concede that. We have a new commander, a brilliant new commander, Gen. (Stanley) McChrystal, and he is devising new strategies and tactics. He further said The Taliban are going to be put under pressure like theyve never seen before. And coupled with our elimination of things like crop eradication so we dont alienate the people, coupled with Gen McChrystals new rules over the use of airpower in an attempt to reduce civilian casualties, we may find that things go much better than expected. The 45 nations and multilateral organisations at the G8 conference issued a statement pledging to look at ways to boost humanitarian aid to Pakistan, where nearly two million people have been displaced by fighting. Holbrooke said allies were not doing enough. The US is by far the largest contributor (of aid) to the refugee relief crisis in Pakistan. I dont mind that ... But other countries are not doing the right amount in my view, he said, adding some foreign ministers had told him privately that their countries could do more. The US envoy told allies that Washington is to dramatically overhaul its Afghan anti-drug strategy. Holbrooke also discussed efforts to support Afghanistans August 20 election. Washington has nearly doubled its troops to combat a growing Taliban insurgency and provide security for the vote. The Western policies against the opium crop, the poppy crop, have been a failure. They did not result in any damage to the Taliban, but they put farmers out of work, Holbrooke said. We are not going to support crop eradication. Were going to phase it out, he said. The emphasis would instead be on intercepting drugs and chemicals used to make them, and going after drug lords. He said some crop eradication may still be allowed, but only in limited areas. Afghanistan supplies more than 90 percent of the worlds heroin. Despite the millions of dollars spent on counter-narcotics efforts, drug production kept rising dramatically until last year - UN figures indicate Afghanistans output has risen more than 40-fold since the 2001 US-led invasion. US President Barack Obama has put Afghanistan and Pakistan at the centre of his foreign agenda and launched a new strategy aimed at defeating al Qaeda and stabilising Afghanistan. Holbrooke said senior members of the US government were calling the upcoming Afghan vote 'the most important event of the year. The fairness of those elections will determine the credibility and legitimacy of the government. We have just seen a spectacularly bad example just next door in Iran, he said. And in these situations, governance becomes more difficult. So, at the end of the process, we would like to see a government elected by its people in a way that is credible and viewed as legitimate by the people and the international community. Afghan Foreign Minister Rangeen Dadfar Spanta told Reuters that Kabul aimed for a free and fair election, but added: We have to recognise the reality, and the reality of Afghanistan, regarding violence, regarding the weak state.