Robert Mugabe and Morgan Tsvangirai, the Zimbabwean opposition leader, this afternoon signed a "historic" deal committing to formal talks over the country’s political and economic crisis.

The two leaders sat together for a signing ceremony at the Rainbow Towers Hotel in Harare separated only by the South African President Thabo Mbeki.

The deal sets up a two-week negotiation period for Zanu-PF and the opposition Movement for Democratic Change to discuss issues including a possible unity government and how to hold new elections.

The ruling party and the opposition have been put under huge international pressure to enter negotiations after Mr Mugabe was re-elected in discredited elections in June.

Mr Tsvangirai, leader of the MDC, had previously refused to sanction any deal with the government until militias halted all violence.

He declared that today’s ceremony was “a very historic occasion” while Mr Mugabe said the agreement would “chart a new way of political interaction”.

Mr Tsvangirai pulled out of last month’s controversial presidential run-off vote because he felt he was threatening the lives of his supporters by asking them to vote against the ruling party.

He claims that 120 of his supporters have been killed between the first round of the presidential poll on March 29 and the second round of voting on June 27.

Mr Mugabe blames the opposition for the bloodshed between the two rounds of the election.

The violence and political uncertainty prompted international condemnation for Mr Mugabe and his ruling party. Western leaders have attempted to impose sanctions on the nation through the UN, but neighbouring states have urged an internal compromise. China and Russia vetoed tougher UN sanctions against the regime.

Mr Tasvangirai’s reluctance to negotiate was overcome last week when President Mbeki, who has been criticised for his approach to the mediation effort, agreed to expand the process to include the African Union, United Nations and other officials from the Southern African Development Community as a “reference group”.

Zimbabwe’s economic collapse under Mr Mugabe’s rule has flooded neighbouring countries with millions of refugees and left the once prosperous country with inflation of at least two million percent.

Today’s agreement is a first step with little clear sign of how the formal negotiations would progress.

Mr Mugabe insists that the opposition should accept that he is the rightfully elected leader of Zimbabwe while Mr Tsvangirai demands that the first round result should stand.

The opposition leader had earlier rejected the idea of a national unity government but he may accept a transitional phase if it leads to fresh elections.

Eldred Masunungure, a political science professor at the University of Zimbabwe, said: “Tsvangirai has so far done well to press for and win a role for both the AU and the UN in the mediation process, but he has to remain alert all the way.

“The actual negotiations are going to be a lot tougher and the MDC’s aim of easing Mugabe out of power or sharing executive power in a transitional government ahead of another election is going to be more difficult to get.”

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