President Hamid Karzai took key steps toward reforming the country's electoral system Saturday, naming a respected former judge to head Afghanistan's election-organizing body and backing down from a bid to keep international representatives off a separate team that monitors fraud. The moves come after months of demands by the U.S. and its allies to clean up the electoral process following massive fraud in last year's presidential balloting. Without meeting those demands, the Afghan government risked losing both funds for an upcoming parliamentary vote and broader international support. Disagreements about how to handle last year's fraud-marred presidential vote nearly derailed the U.S.-Afghan partnership, even as President Barack Obama was ordering thousands more U.S. troops to try to turn back the Taliban. Many international diplomats and officials have been worried that parliamentary elections scheduled for September could prove similarly disastrous. The U.N. said it was now recommending that donor nations release money set aside to fund the parliamentary vote. Karzai also named three Afghans and two U.N. representatives to the separate, U.N.-backed watchdog group that uncovered the fraud in the Aug. 20 presidential election. Last February, Karzai issued a presidential decree excluding foreigners from the watchdog. But the lower house of parliament threw out the decree. Presidential spokesman Waheed Omar said Karzai had agreed to include two U.N. representatives to address the concerns of the international community. Omar said the watchdog will not be able to make decisions without the agreement of at least one of the international representatives -- a South African and an Iraqi nominated by the United Nations. The chief of the U.N. mission, Staffan de Mistura, said that with the changes, he believed the Sept. 18 parliamentary elections would be 'more credible, more transparent' than the presidential election last year. However, it's unclear if Karzai's most recent appointments will result in a more transparent vote, or simply be the latest attempt to paper over an entrenched system of cronyism and vote-trading by giving the appearance of a democratic election. Karzai has repeatedly denied any wrongdoing on the part of the officials he appointed to run last year's election, at times even accusing the U.N. and international advisers of being behind the fraud. Those comments drew sharp rebukes from the White House and the United Nations. The new chairman of the Independent Election Commission is Fazel Ahmed Manawi, an Islamic scholar who joined the opposition Northern Alliance after Kabul fell to the Taliban in 1996 and took part in talks to form a new government after the U.S.-led invasion drove them from power in 2001. As an electoral commissioner last year, Manawi was not considered as closely tied to Karzai as his predecessor, Azizullah Lodin. Lodin said last year that he saw no conflict of interest in briefing the president on discussions between the commission and the U.N.-backed watchdog body, the Electoral Complaints Commission, as it was investigating fraud allegations. The complaints body threw out nearly a third of Karzai's votes, forcing him into a runoff with his top challenger, Abdullah Abdullah. Karzai was proclaimed the winner after Abdullah dropped out of the runoff, saying he was not convinced the second ballot would be fairer than the first. Lodin said this month that he did not want a second term as head of the commission. Another top election official accused of ignoring fraud submitted his resignation at the same time. A representative of Abdullah, Fazel Sancharaki, called Manawi's appointment 'a positive step,' saying he had a reputation for impartiality when he served as a judge on the Supreme Court and for fair judgments as an election commissioner. 'Of course we accept and we are doing so with satisfaction,' de Mistura said of Manawi's appointment. 'Everything we hear is that the person chosen -- Mr. Manawi -- is a very solid person who we can all feel comfortable with.' Also Saturday, two NATO service members were killed by a roadside bomb in southern Afghanistan, the alliance said without disclosing nationalities. Their deaths bring to at least 23 the number of international troops killed so far this month. In northern Afghanistan, NATO and Afghan security forces, assisted with reconnaissance and air support from the international force, were in their third day of an operation to deny insurgents' access to populated areas of Baghlan province. Gen. Ghulam Mushtaba Patang, regional commander of the Afghan National Police, said the operation was under way in a handful of villages where troops have confiscated weapons and defused mines. Five Afghan workers for the U.N. Office of Project Services were taken hostage Thursday in Baghlan, about 120 miles (190 kilometers) north of the capital, Kabul. The U.N. is working with the Afghan Ministry of Interior to seek their release. ---- Associated Press Writer Deb Riechmann contributed to this report. 