The phase error for the velocity measurement was analyzed by means of displacement interferometer in high speed diffuse surface, including the error source, its range and its relationship with the system parameters. The expression for the optical field distribution for the optical signal was calculated. The result suggests that the sources of the phase error include two parts: the diffraction effect and the random phase modulation by the diffuse surface. The error range for the displacement and velocity from the phase error is 10^-6. Furthermore, we measured the velocity profile for the copper plates under explosive loading by the method. Compared with results from VISAR, experimental result indicates that the fiber displacement interferometer can accomplish the same order of precision with the VISAR.