The United States and Britain, among the fiercest critics of the veteran leader, had lobbied for a strong stand at a G8 summit in Japan after he was declared winner of a June 27 poll boycotted by opposition leader Morgan Tsvangirai.

A number of G8 nations already have financial and travel restrictions on Mugabe and his inner circle.

"We will take further steps, inter alia introducing financial and other measures against those individuals responsible for the violence," the G8 said in statement at its summit in Japan.

The grouping of major industrial powers said Mugabe's re-election had occurred without the necessary conditions required for a free and fair vote.

Movement for Democratic Change leader Tsvangirai withdrew six days before the election because of violence by pro-Mugabe militias which the MDC said killed 103 of its supporters.

Mugabe blames his opponents for the bloodshed.

The G8 leaders added that they did not accept the legitimacy of any government that did not reflect the will of the Zimbabwean people.

British Prime Minister Gordon Brown said the statement showed the international community was united against the 84-year-old Zimbabwean ruler, who has been in power since independence from Britain in 1980.

The statement came as the U.N. Security Council prepared to discuss a U.S. and British-backed call to tighten a financial noose around the top echelon of Zimbabwe's government, who could find it more difficult to move money, buy assets and travel overseas.

But such a resolution could face stiff resistance from China or Russia, each of which has a veto in the Council. Although Russia signed onto the G8 statement, Moscow has expressed misgivings about sanctions, which are also opposed by African nations.

France's U.N. ambassador, Jean-Maurice Ripert, said he believed there would be enough Security Council votes to pass the sanctions resolution this week.

ZIMBABWE SEES TALKS

Mugabe lost a March 29 presidential election to Tsvangirai but the latter fell short of an absolute majority, forcing a second round.

Despite warnings from the G8 that investment flows into Africa could suffer if Mugabe was not dealt with, there is little support on the world's poorest continent for sanctions.

South African President Thabo Mbeki and a number of other African heads of state told the summit in Japan that they were against sanctions.

"All of them (African leaders) who were there expressed reservations on sanctions," South African Foreign Affairs Minister Nkosazana Dlamini Zuma said in a joint press conference with British Foreign Secretary David Miliband in Pretoria.

The African Union is worried that harsh treatment of Mugabe could derail prospects of a negotiated settlement of the crisis in Zimbabwe, which is suffering an economic meltdown marked by hyperinflation and chronic food and fuel shortages.

The AU favours talks leading to a unity government.

Tsvangirai on Tuesday denied a report in Zimbabwe's state-controlled Herald newspaper that the MDC had agreed to resume talks with the ruling ZANU-PF under Mbeki's mediation. The paper quoted Justice Minister Patrick Chinamasa.

Tsvangirai has said the opposition will not participate in negotiations until Mugabe's government halts the violence against his supporters and accepts his victory in the March election.

Tsvangirai refused to attend talks with Mbeki and Mugabe in Harare on Saturday because that would have endorsed his rival's disputed re-election. Tsvangirai accuses Mbeki of favouring Mugabe and has called for expanded AU mediation.