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ZIMBABWEAN leader Robert Mugabe is ready to step down after he accepted he failed to win the country`s presidential election, a senior source in his ruling party and diplomats said today.

An official in Mr Mugabe`s ZANU-PF party said the long-ruling president was prepared to step down but was still trying to win agreement from the army`s chief of staff Constantine Chiwenga.

"He is prepared to step down because he doesn`t want to embarrass himself by going to a run-off," the source said on condition of anonymity.

A US State Department official said the ZANU-PF party and the opposition were believed to be discussing whether Mr Mugabe should resign.

The official said the talks followed projections showing the opposition Movement for Democratic Change (MDC) leader Morgan Tsvangirai would beat Mr Mugabe in the election but fall short of the 51 per cent voted needed to avoid a runoff.

"I know that there are supposedly at various levels ... discussions between representatives of the opposition and representatives of the government," the State Department official said.

"I know there were discussions that were going on but we will see what happens and when it happens," he said.

But MDC secretary-general Tendai Biti strongly denied persistent media reports, some citing MDC sources, saying the opposition was in talks on a Mugabe exit.

"I have answered that question a hundred times. I am sick and tired of answering that question. It`s rubbish, absolute rubbish," he said.

Two senior diplomats in the capital Harare, meanwhile, confirmed that a deal had been done for Mr Mugabe to step aside in favour of Mr Tsvangirai.

"Everything indicates that Mugabe will leave power smoothly," said one of the sources.

Various sources had earlier confirmed that senior members of Mr Tsvangirai`s Movement for Democratic Change party and aides to Mr Mugabe had been holding negotiations about an exit strategy since yesterday.

The talks opened after it became clear that Mr Mugabe, who has ruled the former British colony since independence in 1980, had been beaten in the first-round of the presidential election which was held simultaneously with parliamentary elections on Sunday.

The ruling party source said that it now appeared that Mr Tsvangirai had won around 48 per cent of the vote - not enough for an outright majority - but that Mr Mugabe did not want to suffer the indignity of going through a second round run-off with Mr Tsvangirai later this month.

At a later media conference, Mr Tsvangirai declined to declare himself the winner of the country`s presidential election, and refused to confirm a deal allowing him take over from the country`s veteran ruler Robert Mugabe.

"I prefer to wait until as long as the ZEC (Zimbabwe Electoral Commission) confirms the results," Mr Tsvangirai said today, in his first public appearance since Sunday`s joint parliamentary and presidential elections.

Mr Tsvangirai`s party has already said it is confident that he won the poll but the electoral commission, whose leadership is appointed by Mr Mugabe, has yet to release any results from the presidential contest.

Mr Tsvangirai also refused to confirm today any deal was in place to allow him to take over from Mr Mugabe after the presidential elections.

"Any speculation about deals, negotiations is not there because the results have not been announced," Mr Tsvangirai said.

"There is no way they (Mr Mugabe`s ZANU-PF party) will discuss anything, deals or reaching out, until they have finished announcing the result."

The MDC is confident that it has won both the presidential and parliamentary elections and is already slightly ahead of ZANU-PF in the legislative count with two-thirds of the results declared.

However there has still been no official results from the presidential contest, prompting MDC accusations that the authorities were desperately trying to cook up a way to keep Mr Mugabe in power.

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Genocide in Tibet - Dalai Lama