The Taliban appointed Mullah Akhtar Mansour as their new leader, a statement said Friday, marking a historic power transition for the militant movement that has waged a 14-year insurgency in Afghanistan.

The Taliban also announced his deputies -- Sirajuddin Haqqani, who leads the Taliban-allied Haqqani network and has a $10 million US bounty on his head, and Haibatullah Akhundzada, the former head of the Taliban courts.

The announcement comes a day after the insurgents confirmed the death of their elusive leader Mullah Omar, who led the fractious group for some 20 years.

Mansour, a longtime trusted deputy of Omar, takes charge as the Taliban confronts growing internal divisions and is threatened by the rise of the Islamic State group, the Middle East jihadist outfit that is making steady inroads in Afghanistan.

"After (Omar's) death the leadership council and Islamic scholars of the country, after long consultations, appointed his close and trusted friend and his former deputy Mullah Akhtar Mansour as the leader," the Taliban said in a Pashto-language statement posted on their website.

"When Mullah Omar was alive, Mullah Mansour was considered a trustworthy and appropriate person to take this heavy responsibility."

The Taliban on Thursday said Omar died of "sickness", without specifying when, a day after the Afghan government said the one-eyed warrior-cleric had passed away in Pakistan two years ago.

The militant group said Omar never left Afghanistan, from where he led the movement, a claim at odds with Kabul's assertion that he died in a hospital in the Pakistani city of Karachi "under mysterious circumstances".

"Not for a single day in the last 14 years did he go to Pakistan or any other country and led the Islamic Emirate affairs from his headquarters," the statement said, referring to the militant group by its official name and declaring three days of prayer ceremonies in his memory.

The family of the man who led an insurgency that has killed tens of thousands of civilians also asked "Muslims to forgive him if anyone's rights were violated during his time in the Islamic Emirate".

Top contenders

A Taliban official said the process to choose Omar's successor had several stages: the group's ruling council would choose a candidate who must then be approved by a college of religious clerics.

The top contenders included Mansour and Omar's son Mullah Yakoub, who sources said was favoured by some commanders but at 26 was considered too young and inexperienced for such a key role.

The confirmation of Omar's death ends years of fevered speculation about the fate of the leader, who has not been seen in public since the 2001 US-led invasion of Afghanistan that toppled the Taliban from power.

But it cast a pall on the country's fragile peace process aimed at ending the long war, with the Taliban distancing itself from the second round of talks slated for Friday.

The insurgents have ramped up their attacks on military and government targets since the NATO combat mission ended in December.

"Media outlets are circulating reports that peace talks will take place very soon... either in China or Pakistan," the Taliban said in a separate statement posted on their website early Thursday.

"(Our) political office... are not aware of any such process."

Afghanistan later said the meeting scheduled in Pakistan had been postponed, voicing hope that it would be convened in the "near future".

Afghan officials met Taliban cadres this month in Murree, a holiday town in the hills north of the Pakistani capital Islamabad, for their first face-to-face talks aimed at ending the bloody insurgency.

They had agreed to meet again in the coming weeks, drawing international praise, and Afghan officials had pledged to press for a ceasefire in the second round.

'Existential crisis'

Michael Kugelman, Afghanistan expert at the Washington-based Woodrow Wilson International Center for Scholars, said the loss of their long-time leader was a huge blow for the Taliban.

"(The) announcement of Omar's death will spark an existential crisis for the Taliban, and the last thing that will be on its mind are peace talks," Kugelman told AFP.

"It will need to focus on its survival, not talks."

A statement from the Afghan presidential palace on Wednesday said grounds for the discussions are more solid now than before, imploring all insurgents to join the peace process.

A statement from the Afghan presidential palace on Wednesday said grounds for the discussions are more solid now than before, imploring all insurgents to join the peace process.

And Mark Toner, the US State Department's deputy spokesman, said Omar's death was "clearly a moment of opportunity and we would encourage the Taliban to use this time of opportunity to make genuine peace with the Afghan government".

But many Taliban ground commanders have openly questioned the legitimacy of the negotiators, exposing dangerous faultlines within the movement.

The split over the peace process has been worsened by the emergence of a local branch of the Islamic State group, which last year declared a "caliphate" across large areas of Iraq and Syria under its control.

The Taliban warned IS recently against expanding in the region, but this has not stopped some fighters, inspired by the group's success, from defecting.