President Obama personally called President Karzai to offer his condolences after a US soldier went on an apparent shooting spree killing at least 16 Afghan civilians, including nine children and three women.
Obama has said he was "deeply saddened" by the "tragic and shocking" incident and said it does not represent the character of US military or the respect the United States has for the Afghan people.
There have been conflicting reports about whether the killings were the work of one lone "rogue" soldier or a group.
Witnesses told Reuters news agency, they saw a group of US soldiers arrive at their village in Kandahar's Panjwayi district at around 2am and open fire.
However, US officials have said that only one US soldier appears to have been involved in Sunday's shooting.
ITV News' Martin Geissler reports from Camp Bastion on the incident that comes just weeks after violent anti-Western demonstrations were triggered by the burning of the Koran by US soldiers.
Afghanistan's President Hamid Karzai has condemned the incident as "intentional murders" and demanded an explanation from the United States.
In a post on Twitter, Pentagon spokesman George Little said the incident would not change the US mission.
The recent tragedy in Afghanistan will not deter us from pursuing our fundamental strategy. We've come too far with our Afghan partners.
Panjwayi is about 22 miles west of the provincial capital Kandahar city.
The district is considered the spiritual home of the Taliban.
NATO's International Security Assistance Force said it had detained one of its soldiers and an investigation was already under way.
The Minister of Border and Tribal Affairs, Asadullah Khalid, who is investigating the incident, said the soldier entered three homes, killing 11 people in the first one.
Civilian casualties have been a major source of friction between President Hamid Karzai's government and US-led NATO forces in Afghanistan.
The Afghan Interior Ministry condemned the shootings, which could intensify friction between Washington and Kabul as NATO prepares to hand over all security responsibilities to Afghans by the end of 2014, a process which has already started.