The head of the European Union Electoral Observer Group on Wednesday denounced Zimbabwe's refusal to give permission for more than 200 foreign observers to monitor the poll Saturday and Sunday.
And Washington said Harare had extended a ban on some election observers to staff from U.S. and other embassies, saying the move would detract from the credibility of the polls.
Mugabe told an enthusiastic rally of 40,000 supporters in a stronghold of his ruling ZANU-PF party: "We want this election to be peaceful (but) I am not saying that if the opposition provokes you, you must fold your arms. If they attack you, you hit them back with an axe."
Mugabe basked in the high turnout in Mt Darwin, north of Harare, after his humiliation Saturday when only 5,000 people showed up for a meeting in the capital, dealing a severe psychological blow to his party.
The main opposition Movement for Democratic Change (MDC), the first serious challenge to ZANU-PF's 20-year rule, drew four times as many people at its Harare gathering last Sunday.
"By this massive turnout, we have demonstrated who has the support of the people," Mugabe told the rally.
Mugabe claimed his opponents wanted to restore white rule in this southern African nation.
Mugabe has consistently dwelled on race during the heated campaign, though whites account for less than 1 percent of the population and have played only a small role in politics since the country received independence from Britain in 1980.
"The whole countryside, all the farms, are ours, not the whites'," Mugabe told about 8,000 cheering supporters in the rural town of Goora, 90 miles north of Harare.
The president reiterated his plan to seize the country's 4,000 white farms after the elections beginning Saturday, calling it Zimbabwe's last "liberation war."
"This is a black man's country. All others may be settlers, may be residents, but they cannot be our rulers," Mugabe said.
Meanwhile, the head of the European Union observer mission expressed concern about reports of violence and intimidation preceding the election.
"Violence and intimidation have no place in a democratic election campaign (and) should be condemned," Pierre Schori told reporters in the southeastern city of Bulawayo. "We all want to see a democratic and prosperous Zimbabwe play its rightful role here in Africa and in the world."
In Washington, a U.S. government spokesman described Zimbabwe's move to ban diplomats from observing the elections as an "outrageous step."
The Zimbabwean government announced Tuesday that no members of non-governmental organizations or diplomats based in Zimbabwe woud be accredited as observers in the vote.
U.S. State Department spokesman Phil Reeker said the restrictions "will detract from the credibility of the elections" and that is going to "further tarnish Zimbabwe's reputation."
Mugabe is not up for re-election until 2002, and his ruling party and its allies control 147 of the 150 seats in parliament.
However, the main opposition, the Movement for Democratic Change, has capitalized on popular discontent with the country's enfeebled economy. The group has mounted the first serious opposition to Mugabe's 20-year rule.
To combat soaring inflation, Mugabe promised the government would reinstate price controls for certain staple goods, such as cornmeal. But he also said the government would raise the price it pays for corn to help small farmers cope.
It was not clear how his cash-strapped government would be able to carry out both moves simultaneously.
About a dozen white farmers attended the rally and donated tons of grain that was to be distributed afterward. Several farmers said they had received threats from ruling party militants who have occupied more than 1,600 farms nationwide.
In some cases, the militants have been staging rallies on their land, the farmers said, though the property was not being occupied full-time.