KABUL (Reuters) - Hamid Karzai has been re-elected as Afghanistan's president after a run-off vote was canceled, but he faced stern warnings he will have to work harder to retain the West's support after a flawed electoral process.

The result meant Washington and its allies -- engaged in a costly war to stabilize the country -- will have to work with a partner whose legitimacy is bound to be questioned. Karzai himself faces the prospect of having to work with a newly strengthened opposition.

Afghanistan's government-appointed Independent Election Commission (IEC) called off the November 7 presidential run-off on Monday, a day after Karzai's only rival, former foreign minister Abdullah Abdullah, withdrew citing doubts it would be a fair vote.

The IEC, which had said on Sunday the poll would go ahead, said it changed its mind to spare the Afghan people the expense and security risk of a vote with just one candidate. The move ended weeks of political uncertainty.

IEC chief Azizullah Ludin said the commission was also concerned a one-candidate race would raise concerns about the legitimacy of the presidency. The first round of voting in August was marred by widespread fraud in favor of Karzai.

U.S. President Barack Obama, who is mulling boosting U.S. troops in Afghanistan, congratulated Karzai, but told him in a telephone call on Monday he had to get serious in cracking down on corruption and better serving his people.

"I emphasized that this has to be a point in time in which we write a new chapter based on improved governance, a much more serious effort to eradicate corruption (and) joint efforts to accelerate the training of Afghan security forces," Obama told reporters in the White House Oval Office.

There are currently around 67,000 U.S. troops and 42,000 allied troops in Afghanistan and Obama is considering sending up to 40,000 more troops to fight a resurgent Taliban. A White House spokesman said a decision by Obama on troop levels was still weeks away.

Several Obama administration officials have said one issue being weighed in Obama's deliberations is whether the United States has a credible partner to work with in Kabul.

KARZAI'S CABINET

Abdullah withdrew on Sunday, sparking a frantic round of diplomatic efforts to have the run-off canceled. He said on Monday he was saddened by the challenges Afghanistan still faces.

"This is not what our people deserved," Abdullah told Reuters. "I'll pursue my agenda for reform and change."

But Karzai still has plenty of support, especially in the Pashtun-dominated south and east. In Herat, an important commercial hub near the Iran border, hundreds of people took to the streets, dancing and singing in celebration.

Karzai has ruled since U.S.-backed Afghan forces toppled the Taliban in 2001. Many in the West see him as a weak leader at the head of a government riddled with corruption. His next task is to appoint a cabinet acceptable to Afghans and the country's international partners.

"The credibility of the Karzai government is not going to be simply decided by this election, it will now be decided by the actions the president takes over the coming days and weeks," said a Kabul-based Western official who asked not to be named.

"The first test will be the formation of his cabinet. If he is serious about reform we need to see that," he told Reuters.

British Prime Minister Gordon Brown said he had spoken to Karzai after he was confirmed president and that he needed to do more to fight corruption and strengthen local governance to reduce the influence of drug barons.

Britain has around 9,000 troops in Afghanistan and has said it is prepared to send another 500 if Kabul agrees to provide more Afghan troops to train and fight alongside its forces.

U.N. Secretary-General Ban Ki-moon, visiting Kabul on Monday, congratulated Karzai. But he said in a statement that the "new president must move swiftly to form a government that is able to command the support of both the Afghan people and the international community."

ABDULLAH STRENGTHENED

Analysts said Abdullah had emerged in a much stronger position and as the undoubted leader of a previously fractious and divided opposition. Karzai would have no choice but to work with him, they said.

"Karzai has lost his legitimacy; he is a very weak president and he cannot govern without reaching out to Dr Abdullah," said Kabul-based political analyst Haroun Mir.

Karzai's camp had ruled out a power-sharing deal but now may have to name some of Abdullah's team to key posts.

Abdullah said he was open to future talks but also said no deals had been struck in return for his withdrawal, seen by diplomats as one way to spare the country more uncertainty that discredits the government and can only aid the insurgency.

(Additional reporting by Sayed Salahuddin, Hamid Shalizi and Yara Bayoumy in KABUL, Keith Weir in LONDON, Steve Holland and Caren Bohan in WASHINGTON; Writing by Paul Tait; Editing by Eric Walsh and Frances Kerry)

(For more coverage of Afghanistan and Pakistan, see here)