Afghan presidential challenger Abdullah Abdullah announced Sunday that he will withdraw from next weekend's runoff election, effectively handing incumbent Hamid Karzai a victory while undermining the credibility of his rival's government.

Abdullah, a former foreign minister, said he chose to withdraw from the runoff after Karzai rejected a series of demands he made to avoid the massive fraud that plagued the August election.

The conditions included replacing Afghanistan's top election official, Azizullah Lodin, and suspending a number of ministers in Karzai's cabinet.

"I will not participate in the Nov. 7 election," Abdullah said, because a "transparent election is not possible."

Later Sunday, Abdullah told a news conference that he would not tell his supporters to boycott the runoff and urged them not to take to the streets in protest.

The decision caused him "a lot of pain," Abdullah said, but hoped it would "give the people of Afghanistan a chance to move on."

After hearing Abdullah's announcement, Lodin said he would discuss the issue with constitutional lawyers before deciding whether to proceed with the runoff.

David Axelrod, a senior adviser to U.S. President Barack Obama, downplayed Abdullah's withdrawal by saying that most polls showed he would have lost the race.

"So we are going to deal with the government that is there," Axelrod said on CBS's Face the Nation.

"Obviously there are issues we need to discuss, such as reducing the high level of corruption," he said. "These are issues we'll take up with President Karzai."

U.S. Secretary of State Hillary Clinton said Abdullah had run a "dignified and constructive" campaign. The U.S. government "will support the next president and the people of Afghanistan, who seek and deserve a better future," she said.

Kai Eide, the top UN official in Afghanistan, issued a statement Sunday saying that the next step will be "to bring this electoral process to a conclusion in a legal and timely manner."

While Eide did not comment on the issue of going forward with or cancelling the runoff, UN spokesperson Aleem Siddique said the election would be impractical.

"It's difficult to see how you can have a runoff with only one candidate," Siddique said.

Waheed Omar, a Karzai campaign spokesperson, said it was "very unfortunate" that Abdullah has withdrawn but the runoff should go ahead as planned.

"We believe that the elections have to go on, the process has to complete itself, the people of Afghanistan have to be given the right to vote," Omar said.

Abdullah's decision further undermines the country's presidential elections. The first vote, held on Aug. 20, was marred by widespread fraud.

UN auditors threw out hundreds of thousands of ballots cast for Karzai after they found evidence of ballot-box stuffing and other irregularities. Such evidence eventually prompted the runoff.

Abdullah has long said that free and fair elections could not take place in Afghanistan so long as Karzai appointees were heading the Afghan election commission.

Canadian Press reporter Jonathan Montpetit said Abdullah's move has put NATO countries that have troops in Afghanistan, such as Canada, in a "difficult position."

"They lobbied Mr. Karzai quite hard in order to get him to agree to take part in a second round in order to boost the legitimacy of his government," Montpetit told Â鶹´«Ã½ Channel in a Sunday morning interview from Afghanistan. "And now that the challenger in the second round has pulled out, the credibility will again be up to question. It's now back at square one."

While a power-sharing deal between the two men was under consideration, and had the support of the U.S. and other nations, that issue appears to be off the table.

In making his announcement Sunday, Abdullah did not mention a power-sharing deal and Karzai appears to have rejected the idea outright.

A strong and legitimate Afghan government is considered essential for the United States and its allies to increase troop levels in the country further.

President Barack Obama is currently meeting with his key advisers to evaluate his Afghan strategy. A White House official has said Obama will wait until after Nov. 11 to announce his decision.

With files from The Associated Press