Mugabe hugged several heads of state and other diplomats in meetings after the opening session at the summit, one African delegate who was present at the talks said.
"We will press for strong action by the United Nations but [the US] could also act unilaterally [against Zanu-PF]"
Dana Perino, White House spokesperson
"He was hugging everyone, pretty much everyone he could get close to," the delegate said on condition of anonymity.
Amr el-Kahky, Al Jazeera's correspondent in Sharm el-Sheikh, said: "The [opening] speeches by the African officials, especially Egyptian president Hosni Mubabrak, did not touch on the Zimbabwe elections.
"He mentioned Djibouti, Eritrea and Somalia – but he did not mention Zimbabwe. That tells you about the mood into the summit. There are people who don't want to talk about it despite all the Western calls to try to address the subject."
But some African leaders have been openly critical of Mugabe's presence at the AU talks.
Speaking in Nairobi, Raila Odinga, Kenya's prime minister, said the AU should bar Mugabe from the summit.
"They should suspend him and send peace forces to Zimbabwe to ensure free and fair elections," Odinga said.
As the summit went ahead, a US-drafted UN resolution called for the UN Security Council to impose an arms embargo on Zimbabwe, while rejecting the vote as illegitimate.
The draft called for a freeze on the assets and travel of Zimbabweans individuals and companies who helped Zanu-PF to "undermine democratic processes".
Meanwhile, a White House spokeswoman said that US president George Bush's administration may act unilaterally against Mugabe’s government.
"We will press for strong action by the United Nations but we could also act unilaterally," Dana Perino said.
"It could come in multiple ways. Obviously, sanctions work best when there are multiple parties working in concert, like we are with the European Union when it comes to getting Iran to halt its uranium enrichment."
In a fresh sign of international disapproval of Mugabe's re-election, Italy's foreign ministry announced on Monday that it has recalled its ambassador to Zimbabwe.
'Transitional government' call
As the summit got under way, South Africa urged Mugabe's Zanu-PF and the MDC to hold talks towards the formation of a transitional government.
"Both Zanu-PF and the MDC must work together and unite the country and its peoples behind efforts to find a common solution to their national problems," South Africa's foreign ministry said in a statement.
|Mugabe has called for dialogue in the
wake of his re-election [AFP]
"In this regard Zanu-PF and the MDC must enter into negotiations which will lead to the formation of a transitional government that can extricate Zimbabwe from its current political challenges."
A 40-strong AU delegation which travelled to Zimbabwe for the election added their criticisms as the Zimbabwean president attended Monday's summit.
The AU mission's report said that the actual polling process on Friday had proceeded peacefully and "in accordance with the electoral laws of Zimbabwe".
But it then said that "violence in the run-down to the elections" combined with "the fear of violence [which] deterred popular participation in the electoral process" and the lack of "equitable access to the public media" had rendered the poll undemocratic.
"It is the considered view of the African Union observer mission that the election process fell short of the accepted AU standards," the report said.
A group of international statesmen has called on the AU to declare the results of Friday’s election "illegitimate".
"We ask that they [African leaders] clearly state that the results of the June 27 elections in Zimbabwe are illegitimate for they occurred under the cloud of targeted political violence, precipitating the withdrawal of one of the two candidates," the team said.
The 'Elders' group is made up of retired leaders such Jimmy Carter, a former US president, Mary Robinson, a former Irish head of state, and Desmond Tutu, a South African cleric and Nobel peace laureate.
"The African election observers left no doubt: the elections were neither free nor fair," the group said.
During his swearing-in speech on Sunday, Mugabe called for dialogue while praising the widely-criticised efforts of Thabo Mbeki, South Africa's president, to mediate the crisis.
"It is my hope that sooner rather than later, we shall as diverse political parties hold consultations towards such serious dialogue as will minimise our difference and enhance the area of unity and co-operation," Mugabe said.
So far the 53-member AU has pushed for a power-sharing arrangement between Zanu-PF and the MDC.
The Southern African Development Community (SADC), which has been leading mediation efforts to resolve the crisis, "are in consultation to put a text to the summit on how to end the Zimbabwe crisis, notably power-sharing possibilities," a source close to the AU's Commission said on Sunday.