Karzai's appeal, made in a message marking the major Muslim holiday of Eid, came two days after the reclusive Taliban leader, Mullah Omar, issued a statement ruling out talks with the president and calling on Afghans to break off relations with his "stooge" administration.
The hard-line militia has long refused to negotiate with Karzai's government or join what it considers a puppet administration.
"From the Taliban, from Hezb-e-Islami and all our other brothers who stand armed against their country, I hope that for the peace, stability and development of their country, they come back to their homeland, their families," Karzai said. Hezb-e-Islami is a militant Islamic faction led by warlord Gulbuddin Hekmatyar.
Asked about Omar's message, which was posted on a Web site used by the Taliban on Wednesday, Karzai reiterated a commitment to talks.
"We will continue to invite them until peace and stability come to this country," he said.
The United States has said in the past while hard-line Taliban fighters must be defeated, there should be a reconciliation process for those who renounce violence.
"There is an uncompromising core of the Taliban. They must be met with force, and they must be defeated," President Barack Obama said in a speech in March. "But there are also those who've taken up arms because of coercion, or simply for a price. These Afghans must have the option to choose a different course."
The need for talks with the militant group is recognized across the international community, but the conditions attached to such proposals - and the timing of any negotiations - are an issue of contention.
In August, the top United Nations official in Afghanistan, Kai Eide, called for talks with Taliban leaders.
"If you want relevant results, you have to talk to those who are relevant. If you want important results, you have to talk to those who are important," he said.
The previous month, British Foreign Secretary David Miliband had called for talks with regular Taliban fighters, saying while hard-line fundamentalist commanders must be pursued, ordinary rank-and-file Taliban should be given the opportunity "to leave the path of confrontation with the government."
In his Eid message, Karzai reiterated a call to his main rival during the fraud-marred presidential election, Abdullah Abdullah, to join in helping the country - although he stopped short of inviting him into the government.
Abdullah, who served for several years as foreign minister in Karzai's government, pulled out of an election runoff scheduled for earlier this month, saying it was impossible to guarantee a free and fair vote.
Karzai's appeal echoed comments in his inauguration speech last week, when he also reached out to Abdullah.
But speaking after the inauguration speech, Abdullah had accused Karzai's administration of creating problems for the country.
"His record and policies I consider as the basic and fundamental reason for the failures of the international community and Afghanistan together," Abdullah told the AP. "So for me it's those agendas for change which are important rather than my having posts in the Cabinet, that has never been my agenda."
Despite calls for reconciliation, violence continues unabated, particularly in the east and south of the country.
In the volatile southern province of Kandahar, the provincial governor survived an assassination attempt Friday when a remote-controlled roadside bomb exploded as his convoy drove past on the way to a mosque for prayers to mark Eid, his spokesman said.
The blast damaged Turyalai Wesa's car but the governor was unhurt, said spokesman Zelmai Ayubi, adding one policeman was wounded.
Kandahar is expected to be a focus of the additional buildup of tens of thousands of troops that Obama is expected to order for Afghanistan.
Associated Press writer Rahim Faiez in Kabul contributed to this report.