The previous count of nearly 95 percent of votes put incumbent President Juan Orlando Hernandez ahead of his challenger Salvador Nasralla by 1.5 points. He said he planned to meet with officials from the Organization of American States, the U.S. State Department and human rights groups.
The declaration could deepen a spiral of violence that has occurred since the election, as anti-Hernandez protesters and police have squared off repeatedly.
Hernandez himself was in mourning over the death of his 51-year-old sister in an air force helicopter crash on Saturday that also killed five others.
"The mission considers that it has observed a low-quality electoral process and as such can not confirm that the questions surrounding it have been cleared up", its head, Jorge Tuto Quiroga, said.
Going into the election, the United States gave implicit support to Hernandez, who has presided over a crackdown on vicious gangs that are rampant in Honduras, which is beset by violence, poverty and corruption and provides numerous undocumented migrants headed to the US.
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"The OAS mission concludes that it can not guarantee that the doubts about the process have been cleared up".
According to Matamoros, Hernandez received 42.95 percent of votes, while his opposition rival Salvador Nasralla got 41.24 percent.
"The only possible way for the victor to be the people of Honduras is a new call for general elections, within the framework of the strictest respect for the rule of law", OAS Secretary General Luis Almagro said in a press release. Since then it had been considering challenges filed by candidates.
But corruption and drug trafficking allegations cast a shadow over his government, and his re-election bid fuelled charges that his National Party was seeking to entrench itself in power by getting a court ruling allowing him to seek a second term.
Hilda Hernandez had served as the president's communications minister. "We must mobilize immediately to all public places".