The number of Afghan civilians killed in US and Nato air strikes dropped by nearly half last year to 126, the UN said.
The report came a day after Afghan president Hamid Karzai banned government forces from requesting foreign air support during operations in residential areas.
The overall civilian death toll last year also declined 12% to 2,754, from 3,131 the previous year, according to an annual report by the United Nations Mission to Afghanistan which tracks statistics in the 11-year-old war.
While it was the first reduction in casualties in six years, the UN expressed concern about a spike in targeted killings and human rights abuses by armed groups, a worrisome trend as foreign powers prepare to withdraw combat troops by the end of 2014. It also said the number of Afghan women and girls killed and injured in the conflict increased by 20% in 2012.
The report was released as anger is high over an air strike last week in north-eastern Kunar province which killed five children, four women and one man along with four insurgents.
Mr Karzai, angry that the strike was requested by his national intelligence service, ordered government troops to stop asking for foreign air support in residential areas.
The Taliban and other insurgents increasingly targeted civilians throughout the country and were responsible for 81% of the civilian casualties last year, the UN said. The report said so-called anti-government elements killed 2,179 civilians and wounded 3,952, a 9% increase from 2011. By contrast, the number blamed on US and allied forces decreased by 46%, with 316 killed and 271 wounded in 2012.
The senior UN envoy in Afghanistan, Jan Kubis, welcomed the decline in casualties but said "the human cost of the conflict remains unacceptable".
The Afghan interior ministry also said the decrease was a positive sign and pledged to do everything possible to stop the insurgents from attacking civilians.
"They're still using suicide bombers, they still use IEDs (improvised explosive devices) in the very populated areas and they still use civilians as a shield in the villages," ministry spokesman Sediq Sediqi said. "The important thing is that civilian (casualties) should be decreased to zero."