The International Crisis Group called for African mediation leading to a national unity government led by Tsvangirai as the best way to resolve a crisis caused by disputed elections on March 29, saying Western diplomacy would have a limited impact.

It said continued rule by Mugabe, who has led the southern African country since independence from Britain in 1980, would be "catastrophic", for a nation already suffering inflation of 165,000 percent and 80 percent unemployment.

The ICG said military commanders opposed to Tsvangirai had been instrumental in preventing a democratic transition.

"There is growing risk of a coup either before a run-off (in a pre-emptive move to deny Tsvangirai victory) or after a Tsvangirai win," the ICG said. The run-off is on June 27.

Mugabe was highly unlikely to accept a free and fair run-off vote against Tsvangirai, in which he would be "humiliatingly defeated", the respected think tank said.

Intimidation, torture and murder by Mugabe's supporters since the March poll "preclude the possibility of holding a credible run-off," it added.

Official results showed Tsvangirai beat Mugabe in the presidential election but fell short of the absolute majority needed for outright victory.

In a parallel poll, Mugabe's ZANU-PF lost control of parliament for the first time.

GREATER VIOLENCE

The ICG report said African mediation must address the loyalty of the security forces as a priority.

Failure to do so "would risk a Tsvangirai victory leading to a military coup or martial law and the security services splitting along factional lines".

A transitional government would need substantial participation by ZANU-PF members and would implement constitutional reforms before paving the way for free elections.

The ICG said that if it was impossible to avoid the run-off by forming a transitional government, then there must be an immediate stop to violence, and strong monitoring by the regional grouping SADC, the African Union and the United Nations.

The report was sharply critical of South African President Thabo Mbeki who it said had "continued to shield Mugabe".

It said his reluctance to criticise the veteran Zimbabwean leader or condemn the post-election violence had badly undermined his credibility.