Themba Maseko, South African government spokesman, refused to comment further.
Johannesburg's The Star newspaper reported on Wednesday that Mugabe would have amnesty from prosecution and a ceremonial role in government under what it called a draft settlement to resolve the crisis.
It also said that Morgan Tsvangirai, the Movement for Democratic Change (MDC) leader, would run Zimbabwe as executive prime minister under the plan.
He would reportedly run the country for a transitional period with one deputy from each of the other two parties.
The two rivals, as well as a breakaway faction of the MDC, have been in talks for more than two weeks trying to resolve the political deadlock caused when Mugabe was sworn in as president after Tsvangirai boycotted a run-off vote on June 27.
Eldred Masunungure, a Zimbabwean political analyst, said that the teams still being at the table suggested the negotiations were on course.
"I think we are only going to get a meeting of the principal leaders either to clear hurdles over any serious disagreements or to seal an agreement," he told the Reuters news agency.