An African Union delegation has become the third set of observers to declare Zimbabwe's one-man election undemocratic, increasing pressure on Robert Mugabe.
President Mugabe is meeting other African leaders at a summit in Egypt.
Kenyan Prime Minister Raila Odinga has called for the suspension of Mr Mugabe from the African Union until he allows a free and fair election.
He said the AU will be setting a dangerous precedent if Mr Mugabe is allowed to participate in its meetings.
In a preliminary report on Friday's run-off presidential ballot, boycotted by opposition leader and first round winner Morgan Tsvangirai, the 40-strong mission said it had been blighted by violence, intimidation and media bias.
But amid growing calls for Mr Mugabe's ZANU-PF party and Mr Tsvangirai's Movement for Democratic Change to sit down for talks, the AU said it had been encouraged by both sides' stated willingness for dialogue.
Although there were widespread reports of people being forced to vote for Mr Mugabe, the AU report said that polling day had passed off peacefully and 'in accordance with the electoral laws of Zimbabwe'.
However, it then said that 'violence in the run-down to the elections' and lack of equal access to the media had rendered the process undemocratic.
The AU concluded that the election process fell short of accepted AU standards.
The report was issued in Harare as Mr Mugabe was in the Egyptian resort of Sharm el-Sheikh for the first day of the AU summit, which is being overshadowed by the crisis in Zimbabwe.
Meanwhile, a US-drafted UN sanctions resolution has called for the Security Council to impose an arms embargo on Zimbabwe and freeze the assets of specific Zimbabwean individuals and companies.
The draft, obtained by Reuters, says the council would not recognise Zimbabwean President Robert Mugabe's 27 June re-election and would freeze the assets of and ban travel for anyone who helped the government 'undermine democratic processes' or anyone who supported politically-motivated violence.
Mugabe inauguration
A growing number of African governments have urged Mr Mugabe to engage with the MDC.
At his inauguration yesterday, Mr Mugabe put out feelers to the MDC by saying he wanted to hold a dialogue that could 'minimise our differences and enhance the area of unity and cooperation'.
The MDC reacted warily by saying it was hard to reconcile his comments with the violence on the ground but nevertheless said a negotiated settlement that leads to free and fair elections is 'our only exit out of the crisis'.
According to the MDC, nearly 90 of its supporters were killed and thousands more wounded by pro-Mugabe thugs before Mr Tsvangirai pulled out of the contest last weekend and took refuge in the Dutch embassy.
No Westerners were allowed to observe the vote but the AU was one of three African missions - along with the Pan-African Parliament and the Southern African Development Community - who were allowed in.
In its report released late Sunday, the 400-strong team of SADC monitors said the vote had been characterised by violence and failed to reflect the will of the people.
The Pan-African Parliament in its report also released on Sunday called for fresh polls after the Swazi head of the team, Marwick Khumalo, said it was hard to avoid the conclusion that violence which marred the contest was state-sponsored.
