"I regret to say that the representative office of this agency violated Russian legislation," he said.
But he conceded that the cancellation was reversible.
"If the Jewish Agency displays readiness to strictly observe the relevant Russian laws and regulations, the existing problem can be resolved."
Agency officials reacted with concern to this latest development in a month-long imbroglio over the organization's status in Russia.
But they suggested that the problem could be solved by meeting the Russians' request to update their registration documents.
At a Jerusalem news conference Wednesday, Jewish Agency Chairman Avraham Burg denied that the agency had broken any laws.
"The agency has always complied with all local and national legislation and regulations in every country in which JAFI operates," Burg said. "This is how JAFI has operated in Russia, and will continue to do so in the future."
While Jewish emigration has not yet been affected, that situation could change if the agency loses its power to operate in Russia.
The agency has helped hundreds of thousands of Jews emigrate from the former Soviet Union to Israel since the gates reopened in 1989. An estimated 2 million Jews still reside in the former Soviet Union.
Karasin's public statements Tuesday clearly shocked agency officials, who had planned to apply for reaccreditation the very next day.
But one highly placed Israeli official who requested anonymity cautioned that the timing was probably coincidental.
He said Karasin likely was responding to letters from overseas pressing the government to explain the cancellation.
Burg told reporters that he spent Tuesday night in emergency consultations with Prime Minister Shimon Peres and Foreign Ministry personnel, and had spoken by phone with several diaspora Jewish leaders.
Evidently reluctant to let tensions escalate, Burg asserted, "This is not an issue between the states of Israel and Russia, but between Russia and a nongovernmental organization."
He said, "We are ready for every contingency," but refused to say what steps might be taken if the Russian government turns down the agency's reaccreditation request.
Without actually blaming Russian officials, Burg implied that they had stalled the reaccreditation process by refusing to accept the agency's completed application forms.
The news conference was cut short when Alla Levy, director general of the agency's unit in the former Soviet Union, called from Moscow to say she had successfully delivered the forms to the Russian Justice Ministry.
The ministry now has 30 days to accept or deny the agency's application.
But the Israeli source said developments could rest on more than whether the agency has submitted the proper papers.
Mark Levin, executive director of the National Conference on Soviet Jewry, said, "The substance of the situation really hasn't changed," but "the type of attention" it has drawn has changed.
"We'll have to wait and see" what the impact of this latest publicity will be on the agency's operations, he added.
So far, "nothing has changed on the ground in terms of the movement of people."