Violence broke out on Saturday night when gunmen opened fire in several parts of the southern Pakistani city of 18 million ahead of the vote. At least 29 people have been killed since then, police said.
The election was being held to replace lawmaker Raza Haider, a member of Karachi's dominant Muttahida Qaumi Movement (MQM) whose killing by gunmen two months ago triggered violence that resulted in 100 deaths in a single week.
The MQM accused its rival, the ethnic Pashtun-based Awami National Party (ANP), of carrying out the attacks and killing some of its members. The ANP, which had boycotted the elections over rigging fears, denied the allegations.
"Soon after announcing its boycott of the by-election, ANP's terrorists began killing innocent citizens in a bid to sabotage the election process," the MQM, which was expected to win the election by a large margin, said in a statement.
Karachi has a long history of ethnic, religious and sectarian violence. But hundreds of targeted killings this year have raised concerns that violence would escalate and create a new crisis for the US-backed government in Islamabad.
Besides trying to contain violence in Karachi, the government faces a Taleban insurgency and the task of rebuilding areas devastated by summer floods which inflicted $9.7 billion in damage and will strain the weak economy for years to come.
Stock market investors keep a wary eye on tensions in Karachi, home to Pakistan's main port, stock exchange and central bank and the main gateway for Western military supplies bound for neighboring land-locked Afghanistan.
The MQM's leadership was weighing options in response to the violence, including withdrawing from the provincial coalition government led by the Pakistan People's Party (PPP) of President Asif Ali Zardari, a source said. It has made similar threats in the past.
