The Brussels-based International Crisis Group described the rivals’ power-sharing talks as "hopelessly deadlocked" and said no new formula based on Mugabe remaining president and Tsvangirai becoming prime minister looked workable.
"There is a possible negotiated way forward that could avoid Zimbabwe’s complete collapse," said the report from the thinktank on Tuesday.
"The core idea is to establish a transitional administration, run by non-partisan experts, in which neither Mugabe nor Tsvangirai would have any position."
The group said such an administration would have a mandate to stabilise the economy and prepare for a new presidential election in 18 months. It also recommended replacing Zimbabwe mediator Thabo Mbeki, the former South African president, who has been accused by the opposition of favouring Mugabe.
Talks on a September power-sharing deal have reached deadlock over cabinet posts. Mugabe was re-elected unopposed in June after Tsvangirai pulled out of a run-off vote, citing attacks on his supporters.
A cholera epidemic has worsened the humanitarian crisis in Zimbabwe, which is suffering economic meltdown.