The revelation threatens to fell another of the U.S. military's biggest names after Petraeus' surprise resignation last week. It also complicates President Barack Obama's efforts to wind down the war in Afghanistan and reorganize his national security team following his re-election.
A senior defense official told Reuters the emails between Allen and Kelley were seen as potentially inappropriate because they were "flirtatious" in nature, not because they dealt with sensitive information. Allen has denied that the two had a sexual relationship, officials said on condition of anonymity.
Defense Secretary Leon Panetta said Allen, a four-star Marine Corps general, would stay in his job for the time being, and the White House said Obama still had faith in Allen's ability to command U.S. troops in Afghanistan.
But asked how Obama saw the unfolding scandal at a time when his priorities include impending "fiscal cliff," Press Secretary Jay Carney said: "I certainly wouldn't call it welcome."
Obama suspended plans to transfer Allen to Europe, where he was to be the top commander of U.S. and allied forces in the region.
Both Allen and the official due to replace him in Afghanistan, Marine Corps General Joseph Dunford, must be confirmed by the U.S. Senate before they can take their new posts in February.
Top lawmakers on the Senate Armed Services Committee said they would go ahead with a confirmation hearing for Dunford on Thursday. Allen's appearance was canceled.
Allen had just submitted recommendations on what role the United States should play in Afghanistan after most American combat troops withdraw by the end of 2014.
The investigations raised questions about how top U.S. officials in sensitive national security posts allowed themselves to become so personally involved with the women.
Kelley, 37, is a fixture in military circles in Tampa, Florida, where she was a volunteer social liaison at MacDill Air Force Base, home to the U.S. Central Command. She and her husband, surgeon Scott Kelley, became friends with Petraeus when he was stationed there from 2008 to 2010.
Her complaints about harassing emails from the woman with whom Petraeus had an affair, Paula Broadwell, prompted an FBI investigation that ultimately disclosed Petraeus' involvement with Broadwell.
People close to Petraeus say he had no romantic relationship with Kelley, but Broadwell may have seen her as a rival.
Both Petraeus and Allen had recently intervened in a bitter custody battle on behalf of Kelley's twin sister. The men wrote letters in September to the District of Columbia Superior Court in support of the twin sister, Natalie Khawam, as she sought more visitation rights with her son, court papers showed.
Officials suggested they were concerned by the volume of communications between Allen and Kelley over the past two years, rather than the possibility that the two shared classified material or engaged in an extramarital affair.
"We are concerned about inappropriate communications. We are not going to speculate as to what is contained in these documents," one official said.
Details on content of the emails were not revealed.
The FBI referred the case to the Pentagon on Sunday and Panetta directed the Defense Department's Inspector General to handle the investigation. Panetta also informed lawmakers who oversee military affairs.
FBI RAID, SHIRTLESS PHOTOS
FBI agents searched the Charlotte, North Carolina, house of Broadwell late Monday in a sign that the case involving Petraeus was not fully closed.
Agents entered the house carrying boxes at around 9 p.m. (0200 GMT Tuesday) and emerged four hours later, carrying away what appeared to be two computers and about 10 boxes.
Broadwell's family was not at home at the time.
U.S. officials had said in recent days that their investigation was largely complete and that prosecutors had determined it was unlikely they would bring charges in that case, which started when Kelley contacted an FBI agent in Tampa about harassing emails from an anonymous source.
That FBI agent, who has not been identified, came under scrutiny himself after it was discovered he had sent shirtless photographs of himself to Kelley "long before" this investigation, a law enforcement official told Reuters.
The FBI agent, who alerted an FBI cyber squad to the Broadwell case, apparently became frustrated at the pace of the investigation and complained to a member of Congress about it, the official said.
The emails between the two women were of a "childish", jealous nature and showed some one-upmanship of trying to come across as being more important to Petraeus, the official said.
Lawmakers and others have questioned whether Broadwell, who co-wrote a biography of the decorated former general, obtained classified information from him or another source.
Panetta had earlier said Petraeus did the right thing by stepping down, given the security concerns, but he was saddened by the end of the retired general's distinguished career.
