The opposition said that alleged abductions of its members by Zanu-PF were a "slap in the face" to the negotiations.
Kgalema Motlanthe, South Africa’s president, Armando Guebuza, the leader of Mozambique, and Thabo Mbeki, regional mediator and South Africa's former president, are among those who are mediating in the power-sharing talks.
But efforts by the Southern African Development Committee (SADC) have not prompted the two sides to reach a deal.
The meeting between Mugabe, Morgan Tsvangirai, the leader of the MDC, and Arthur Mutambara, who leads a breakaway MDC group, is part of efforts to rescue a power-sharing pact reached in September.
"Now is the time to find common ground among Zimbabweans. Now is the time for flexibility, compromise and pragmatism," Mutambara said at the venue.
"As the opposition, we share and agree with the demands made by MDC-T. Those demands must be addressed. We hope Robert Mugabe and Zanu-PF respond positively to those demands."
But Mugabe said that the MDC should accept existing proposals or end the talks, state media reported.
The dialogue comes in the wake of a disputed general election last year, which the MDC alleges that Zanu-PF rigged in Mugabe’s favour.
Tsvangirai won the presidential election last March but did not take enough votes to secure an outright win. He pulled out of the subsequent run-off, citing violence against MDC supporters.