The solution of the interface problem is only in
$H^{1+\alpha}(\Omega)$ with $\alpha>0$ possibly close to zero and, hence, it is difficult to be approximated accurately. This paper studies an accurate numerical method on quasi-uniform grids for two-dimensional interface problems. The method makes use of a singular function representation of the solution, dual singular functions, and an extraction formula for stress intensity factors.
Using continuous piecewise linear elements on quasi-uniform grids, our finite element approximation is shown to be optimal, $O(h)$, accurate in the $H^1$ norm. This is confirmed by numerical experiments for interface problems with $\alpha < 0.1$. An $O(h^{1+\alpha})$ error bound in the $L^2$ norm is also established by the standard duality argument. For small $\alpha$, this improvement
over the $H^1$ error bound is negligible. However, numerical tests presented in this paper indicate that the $L^2$ norm accuracy is much better than the theoretical error bound.