But state television denounced foreign media reports of low turnout. It showed long queues in a semi-rural constituency close to Harare and said voters ignored MDC appeals to abstain.
Another African election monitor, who asked not be to named, said turnout was low except in some ZANU-PF strongholds.
Mugabe voted with his wife at Highfield Township, on the outskirts of Harare. Asked how he felt, he told journalists: "Very fit, optimistic, upbeat," before being driven away.
In the affluent Greendale suburb of Harare in the morning there were scores of people queuing for bread at a shopping centre but only 10 at a polling station nearby.
"I need to get food first and then maybe I can go and vote.I heard there could be trouble for those who don't," said Tito Kudya, an unemployed man.
Mugabe has presided over an economic collapse accompanied by hyper-inflation, 80 percent unemployment, food and fuel shortages.
A loaf of bread now costs 6 billion Zimbabwe dollars, or 150 times more than at the time of the first round of elections.
Khumalo said his observers had seen a very long queue in the morning but it turned out to be people lining up for bread.
"The ingredients that would make this election free and fair, we haven't seen them yet," he told BBC television.
A middle-aged man waiting for a bus said it was dangerous to talk about politics. "Your tongue can cost you your teeth," he told Reuters, adding that he would vote.
"I hope that will mean the trouble that we have been seeing also goes away," he said.
Analysts said Mugabe was pressing ahead with the election to try to cement his grip on power and strengthen his hand if he was forced to negotiate with Tsvangirai.
The Zimbabwe Electoral Commission said the vote was going well. "Everything is well on course and people are voting peacefully," Deputy Chief Elections officer Utoile Silaigwana told state radio.
The vote has been widely condemned both inside and outside Africa.
African Union foreign ministers were discussing Zimbabwe ahead of a summit in Sharm el-Sheikh, Egypt. "I don't think we are going to accept the result but we are still discussing," one minister said, asking not to be identified.
A security committee of the Southern African Development Community (SADC) called earlier this week for the vote to be postponed, saying Mugabe's re-election could lack legitimacy.
But Mugabe, who thrives in defiance, remained unmoved and said he would attend the AU summit to confront his opponents.
Mugabe says he is willing to sit down with the MDC but will not bow to outside pressure.
U.S. Secretary of State Condoleezza Rice said after a Group of Eight nations (G8) meeting in Japan that Washington would raise the issue of further sanctions at the U.N. Security Council. The European Commission described the run-off as "a sham".
