Dimitra Ioannou, the deputy head of the EU Election Observation Mission to Afghanistan, said on Wednesday that there were questions over the authenticity of 1.5 million votes, about 1.1 million of them cast for Karzai.
She said there had also been 300,000 questionable votes for Abdullah Abdullah, Karzai's main rival and a former foreign minister, with the rest of the suspicious votes cast for other candidates.
Despite his vehement defence of the conduct of the election, Karzai said he would support a fair and unbiased investigation into any cases of suspected fraud.
"Fraud, if it were conducted, it has to be investigated, and investigated fairly, and without prejudice," he said.
Al Jazeera's Zeina Khodr, reporting from the Afghan capital, Kabul, said that Karzai also stressed the need for national unity during the uncertainty over the election outcome.
"The president [told] the Afghan people that there will be no violence, there will be no security incidents," she said.
"People here have been worried that as a result of the political impasse that civil unrest may erupt.
"He is doing his best to convince them that this election was, in his words, a success.
"We were in Kandahar during the elections, and we have to remember that election observers were not able to visit most areas because of the elections.
"So what Karzai tried to do today was defend the whole election process. He even admitted that instances of fraud did occur.
"But what he tried to stress was that it was not massive fraud, even accusing the international media of exagerating the extent of fraud.
"But people are frustrated ... saying the credibility of the whole process is now in question."
The Independent Electoral Commission (IEC) announced final preliminary results for the election on Wednesday giving Karzai 54.6 per cent and Abdullah 27.8 per cent of the vote.
The results will not be confirmed until all cases of fraud are investigated.
Abdullah said that the announcement of the preliminary results was premature.
"First of all this is not final. Second of all this is not right that they are making this announcement, according to the electoral law, because the issues of complaints have not been dealt with," he told Al Jazeera.
"Also it includes hundreds and thousands fraudulent votes ... those are included in these results so it doesn't mean a lot."
Electoral officials have warned that hundreds of thousands of votes could be held back for two to three weeks for investigations, delaying the final announcement of the victor.
Karzai must win 50 per cent of the vote to avoid a second round run-off with his rival.
Khodr said that if a run-off is delayed due to fraud investigations the holding of the vote could be impossible on logistical and security grounds due to the harsh Afghan winter.
"Some people are talking about an interim government until a second round of voting can take place in the spring.
"But President Karzai is against that idea. He said that according to the constitution he will remain in power until a new president is elected to office.
"This is the same constitutional crisis we witnessed last May when the president's term in office ended and the opposition demanded that he stepped down, which he refused to do until a new president was in office."