Contacting authors directly when reviewing a paper
Unless the editor gives you permission, I think it would be improper to deal with the authors directly. While it might speed things along a bit, it would also cut the editor and his/her staff out of the conversation. 

It is better to just write your report to the editor and submit it in the usual way. This establishes a record of the revisions. 

It also avoids a situation in which a reviewer would think that his/her comments were important enough to warrant co-authorship. That might not be your position, but some might want to consider it if the option were open. 

Don't feel bad about the authors. The paper must eventually stand on its own, independent of any relationship between reviewers and authors. You are doing them a favor by being honest and having the editor in the loop aids that. 

But the editor may have different views, in which case, you can follow them. You have done the right thing by asking.