In a surprise move, he dropped Defense Minister Mohammed Fahim, arguably the nation's most powerful warlord, from his ticket, replacing him with Ahmad Zia Massood, the brother of Afghanistan's greatest resistance hero.
"I hope the Afghan people will recognize us as a good team and I hope the people of Afghanistan will vote for us," Karzai said at a press conference in a shady courtyard of the presidential palace, flanked by his vice presidential choices and dozens of aides and security guards.
Ahmad Zia Massood is Afghanistan's current ambassador to Russia and the brother of slain resistance hero Ahmad Shah Massood, who was killed by al Qaeda terrorists on Sept. 9, 2001. Karzai named Hazara leader Karim Khalili his choice for second vice president.
It was not clear whether Fahim would stay on as Defense Minister or become an opponent of Karzai, and he had no immediate comment.
Thousands of militia soldiers, most of them loyal to Fahim, remain in the capital, including a division still untouched by a drive to round up and remove heavy weapons from the city.
NATO peacekeepers were taking no chance on potential trouble.
Convoys of German and Canadian armored vehicles picked their way through the crowded thoroughfares and thundered through the back streets. A German vehicle broke down in one downtown street causing a major traffic jam.
American troops parked two Humvees at the top of the streets leading to the country's electoral office, which was sealed off by Afghan National Army troops and intelligence officers.
Fahim was notably absent from Karzai's press conference. The president said he was "sorry" that the defense minister was not there, but went on to praise him as "our brother" and "a great warrior."
Karzai scuttled a state visit to Pakistan scheduled to begin Monday because of the wrangling, and he did not announce his candidacy until the last possible minute. Monday was the deadline for presidential hopefuls to file their papers for the Oct. 9 vote.
The U.S.-backed Karzai is the overwhelming favorite to beat about a dozen challengers and win a five-year term. He said he saw Massood as the best candidate to replace Fahim.
"I thought he'd be the best choice to serve this country of ours together with me for a better, more prosperous future," he said.
The vote, the first direct presidential election in Afghan history, is seen as a referendum on the international communities efforts to rebuild this country after more than two decades of war.
Under new electoral laws, all candidates except the president must temporarily resign from their posts, meaning Fahim would have had to relinquish his grip on the Defense Ministry in order to stand as Karzai's vice presidential pick. He was reportedly pushing to install a loyalist as defense chief to rule the ministry in his stead.
Cdr. Chris Henderson, a spokesman for the NATO-led security force in the capital, said it had increased patrols in the city because of the rising political temperature.
"We are very confident that this is a peaceful political dialogue that is going on and that it will be resolved peacefully, but military organizations have to take prudent measures in case things turn out differently," he said.
Karzai said recently that militias rather than Taliban insurgents pose the biggest obstacle to pacifying and rebuilding the country after more than two decades of fighting.
But his government remains dominated by militia commanders such as Fahim, who was made Defense Minister after commanding the Northern Alliance forces which helped the United States drive out the Taliban in late 2001.
Fahim has failed to deliver on pledges to disarm the factions which still control much of the country. His allies hold powerful positions in each of the country's four main provincial cities.
By Stephen Graham