About 50 civilians have reportedly been killed in raids by US-led coalition troops in the past week, sparking four days of anti-American and anti-Karzai protests around the country.
The US army recognised that civilian deaths had occured in the raids and said that more than 136 Taliban fighters were killed in the clashes.
Afghan protesters have called for the removal of Karzai for failing to stop the killings, which many observers said were contributing to the Taliban's increasing popularity.
Hamidullah Tarzi, a former government minister, said the current small protests were not yet a major problem for Karzai, but they would become more serious if killings continued.
"Now that has been eroded and that is not a good sign. That may have future repercussions," he said.
Karzai said he had repeatedly told US and Nato commanders to co-ordinate their anti-Taliban raids with his government, stop searching civilian houses and exercise caution to avoid civilian deaths.
Karzai said: "Unfortunately, that co-operation and co-ordination as we tried it has not given us the result of what we want.
"That is something that must be changed, must be corrected or the consequences will be bad for all of us."
In addition to protests over civilian deaths, Karzai faces rising dissatisfaction over the lack of development and rampant corruption in the country since the Taliban were ousted from power in 2001.
The Afghan president said on Wednesday that he is working to reshuffle his cabinet.
Senior members of the Afghan government are trying to curb the president's powers and have formed a political party to push for the creation of a new post of prime minister, who would take some of the powers held by Karzai.
Some pro-Karzai members of parliament have said the dissidents should leave the government if they want to oppose the president.
Karzai said: "The government as a whole should be reformed. Efforts are under way in this regard."
He did not say which ministers would be affected by changes to the government.
|Opposition MPs are seeking to curb Hamid|
Karzai's presidential powers
The National Front Party, formed last month, wants provincial governors and mayors to be elected, which would remove from the president an important lever of power in a country where central control has often been weak.
As president and commander-in-chief of the armed forces, Karzai chooses his cabinet, although ministers have to be endorsed by parliament. He also appoints governors and mayors.
Opposition politicians have called for a loya jirga, Afghanistan's traditional grand assembly of tribal chieftains and elders, to amend the constitution.