The Buccaneers are currently in Spain where they kicked off their tour with a 1-1 draw with Cordoba and a 2-1 victory over Cadiz.
But they were second best at the Marbella Football Center as Youssef En-Nesyri opened the scoring after just 11 minutes.
Bucs were level through a 27th minute Thalente Mbatha screamer and Tshepang Moremi had the ball in the back of the net three minutes later, but his effort was disallowed for a foul.
Mousa Diaby restored Al-Ittihad’s lead just before the half-time break and substitute George Inelikhena gave the Saudi Pro League side a two-goal lead with four minutes of the match remaining.
Bucs substitute Yanela Mbuthuma pulled a goal back in stoppage time at the end of the game.
Speaking to SuperSport after the match, Ouaddou explained that his defence must work hard to recapture their form of last season.
“Of course, we are in the preparation. We know that we still have to work some areas,” he said. “And in that area, we need to find back our strength defensively because it’s an area where we’ve been very strong last season.
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“And now, since every game, we’ve been conceding goals. So it’s an area that we have to strengthen.
“I think the result is not the reflection of the game. I can say that I was really happy about the performance of the two teams. Because there is one team that played 60 minutes and the other one 30 minutes.
“Overall, in terms of physicality, the team is coming very close to the intensity that we want. And in that area, I’m very happy,” the head coach added.
Ouaddous’s charges next face Las Palmas in their final pre-season friendly on Wednesday.