Official results announced on Saturday showed Mugabe's Zanu-PF party winning 71 of the 120 contested seats against 39 for the opposition Movement for Democratic Change (MDC).
With the president appointing 30 additional members of the 150-seat parliament, Zanu-PF now has the two-thirds majority that Mugabe had set as a major election goal.
MDC leader Morgan Tsvangirai has said the polls were marked by massive fraud and held in an atmosphere of fear and political intimidation - an assessment echoed by the United States, Britain and other major Western powers.
Tsvangirai, who has accused Mugabe of rigging the country's previous two elections in 2000 and 2002, has hinted his supporters may launch protests rather than attempt to fight the result in court.
The official Herald newspaper urged the MDC on Saturday to accept defeat, saying the party's poor showing was the result of its "reflex reaction" to court Mugabe's Western critics rather than Zimbabwean voters at home.
"The lesson the MDC should learn from its defeat is that electoral battles are fought in Zimbabwe, not Europe," the newspaper said in an editorial.
"The lesson the MDC should learn from its defeat is that electoral battles are fought in Zimbabwe, not Europe"
Mugabe, 81, and in power since independence from Britain in 1980, has dismissed criticism of the election, which he said were as free and fair as any in the world.
Analysts say the party could use its majority to push through constitutional changes to protect Mugabe from the kind of prosecutions that have plagued some other African leaders when they stepped down. Mugabe is due to retire in 2008.
Mugabe blames his Western critics for sabotaging the economy and had demanded a crushing Zanu-PF victory to see off the challenge from the MDC, which he says is a British puppet.
The MDC says the whole electoral process favoured Zanu-PF and the 5.78 million-strong voting roll was inflated with 1 million ghost voters. It also questioned why tens of thousands of voters were turned away from polling stations.
MDC party leaders were due to meet on Saturday to consider the path forward.
Some people were said to have
been turned away from the polls
Regional observers from the Southern African Development Community (SADC), who had been expected to give the poll a clean bill of health, expressed concerns.
"The picture that emerged at the close of the poll was an election day which was peaceful. Notwithstanding these initial observations the SADC elections observer mission is however concerned with the number of people who were turned away from polling stations," the mission said in a statement.
"It is still not clear to us exactly how many people were affected in this way as well as the reason for them not being able to cast their votes," added the observers.