Andrew Dawson, who was heading the mission, urged the government to respect the results, especially in the predominantly Kurdish provinces. Since 2016, the government has replaced elected officials with trustees in 95 municipalities for alleged links to outlawed Kurdish militants.
The Council of Europe acknowledged Turkey's security concerns, but said the government's definition of terrorism wasn't consistent with European standards, especially when it comes to Kurdish political parties like the HDP.
Dawson said that "we do not accept assertions that assume every HDP mayor is or could be a terrorist or has terrorist connections."
Dawson also commended the Turkish public for the high turnout rate of 84 percent and called it a "sign of healthy democratic interest."
Behlul Ozkan, associate professor of international relations at Marmara University, says Turkish President Recep Tayyip Erdogan's loss of ground in local elections in Ankara and Istanbul indicate that his socially conservative and construction-driven policies no longer resonate in the cosmopolitan cities.
"Political Islam's quarter-century-old hegemony in Turkey's two largest cities is over," he said. "The basic problem is that Erdogan is not able to get votes from middle-income earners who believe that the economy, education and urban administration are not run well."
The fact that there was no major reduction in his overall votes, however, showed that his base still trusted him to put the economy right, Ozkan said.
"This is what the AKP voter said: 'Yes there are serious economic problems but Erdogan is the person who can solve them.'"
The ruling party's mayoral candidate for Istanbul says it's still too early to call the race in Turkey's largest city as party officials prepare their objections to the vote count.
Binali Yildirim, the Justice and Development Party's candidate, on Monday accepted that his opponent Ekrem Imamoglu was leading in Sunday's election by about 25,000 votes in Istanbul.
He suggested that there could be a recount of some 319,500 votes that were declared void and canceled.
Yildirim said: "Whoever the (High Electoral Board) gives the mandate to will become the mayor. We know how to congratulate (a winner) but the process is continuing."
Unofficial results relayed by state-run Anadolu news agency show Imamoglu winning 48.8 percent of the votes while Yildirim captured 48.5 percent. One percent of the votes were still to be counted.
An official with Turkey's ruling party says they will challenge the vote count for the mayoral election in the capital city, Ankara.
Fatih Sahin, the secretary general of the Justice and Development Party, or AKP, said they had identified mistakes in the result and would file their objections to the electoral board.
According to unofficial results by the state-run Anadolu news agency, Mansur Yavas, the main opposition's candidate, won 50.9 percent of the votes in Ankara, bringing an end to 25 years of administration by the AKP and its Islamic-oriented predecessor.
The AKP's candidate, Mehmet Ozhaseki, currently stands at 47.1 percent. Sahin said their objections could turn the results to his party's advantage.
Parties have three days to file objections, and they are expected in Istanbul, as well, where the AKP is also facing a potential loss.
The opposition candidate running to be Istanbul's next mayor has declared victory after unofficial results showed him leading in Turkey's local elections.
Ekrem Imamoglu, the candidate from an alliance led by the secular Republican People's Party, thanked all Istanbul voters on Monday.
Unofficial results by state-run Anadolu news agency said he had won 48.8 percent of the vote Sunday and his opponent, former Prime Minister Binali Yildirim of the ruling party, had captured 48.5 percent. One percent of the votes were still to be counted.
Parties have three days to file objections and official results are expected in the coming days.
If the opposition won in Istanbul, Turkey's largest city and commercial hub, that would be a watershed moment. Erdogan's own ascent to power began in 1994 as Istanbul mayor and the city has been held by his party and allies for 25 years.
Turkish President Recep Tayyip Erdogan declared victory in municipal elections but the opposition's success in key cities dealt a significant blow to his party's dominance.
According to unofficial results, the ruling party lost the capital, Ankara, and the head of Turkey's electoral board said the opposition was also leading in Istanbul.
Sunday's local elections were widely seen as a test of support for Erdogan as the nation of 81 million people faces a daunting economic recession with double-digit inflation, rising food prices and high unemployment.
Ballot counts were still underway Monday morning in an anxious wait for Istanbul, Turkey's largest city and commercial hub. Both candidates —Ekrem Imamoglu for secular Republican People's Party, or CHP, and former Prime Minister Binali Yildirim for the ruling party— claimed they had won.
Electoral board head Sadi Guven said votes were still being counted.
Fraser reported from Ankara.