"Clearly they have chosen the path of arrogance, unilateralism that's a serious blow to confidence building in the talks," said Movement for Democratic Change (MDC) spokesman Nelson Chamisa.

Power-sharing talks between Mugabe's ruling ZANU-PF and Morgan Tsvangirai's MDC are stuck by what the opposition says is the veteran Zimbabwean leader's refusal to give up executive power.

The MDC said the two MPs were arrested as they entered the parliamentary building and police also attempted to arrest another MDC MP but he was rescued by other parliamentarians.

There was no immediate comment from the police on the arrests. Soon after the March elections, police announced a manhunt for several MDC politicians over charges of murder, rape and electoral violence.

Parliament began swearing in MPs, including those of the MDC, in groups of 10 despite the arrests of the two opposition lawmakers, a Reuters reporter said.

TALKS IN DANGER

Opposition and ruling party MPs exchanged light-hearted exchanges and taunts across the floor in front of a packed public gallery.

Mugabe appointed three non-constituency members of parliament's upper house, the Senate, and eight provincial governors, state media said.

Mugabe intends to officially open parliament on Tuesday despite protests by Morgan Tsvangirai's opposition Movement for Democratic Change (MDC) that this would scuttle negotiations on forming a unity government to end the current political impasse.

Tsvangirai maintains that a power-sharing agreement is being held up by Mugabe's refusal to give up executive powers. Mugabe says Tsvangirai wants to strip him of all authority.

The MDC won 100 seats in March elections and ZANU-PF 99, a breakaway MDC faction has 10 seats and there is one independent seat.

Whoever the breakaway MDC faction of Arthur Mutambara sides with gets an effective majority in the legislative chamber.

Western countries, key to the funding that Zimbabwe needs to emerge from economic collapse, have said they would only recognise a government led by Tsvangirai.

Tsvangirai defeated Mugabe in a first round presidential vote in March but without an absolute majority. Mugabe won a run-off election in June which was boycotted by Tsvangirai over political violence which he said killed over 120 MDC supporters.

Mugabe has often accused Tsvangirai of being a puppet of the United States and former colonial power Britain and ignoring Western sanctions he blames for Zimbabwe's economic decline.

Both Mugabe's ZANU-PF and the MDC under intense pressure from within Africa and around the world to reach an agreement that will pave the way for rebuilding Zimbabwe's devastated economy.

Zimbabwe's inflation rate rocketed to over 11 million percent in June and chronic food, fuel and foreign currency shortages are worsening.