"We have lost confidence in the power-sharing deal being a success with Mugabe in power. He has lost touch with reality," said Jendayi Frazer, US assistant secretary of state for African affairs.
Ms Frazer was in the South African capital to consult with regional leaders about the deteriorating political and economic crises in Zimbabwe, now also in the grips of a cholera epidemic that has already claimed more than 1,120 lives.
Mr Mugabe is "completely discredited" and southern African leaders now want to know "how do they facilitate a return to democracy without creating a backlash like a military coup or some sort of civil war," she said.
Washington’s tough talk on Zimbabwe comes after Mr Mugabe announced last week that Zimbabwe "is mine" and that he would never surrender to Western pressure to resign.
Mr Mugabe, who has been in power since Zimbabwe’s independence from Britain in 1980, used his ZANU-PF party’s 10th annual congress this weekend to brush off the mounting international pressure.
"They now want to topple the Mugabe government. ‘Mugabe must go because Bush is going,’" he said, referring to US President George W Bush, who leaves office in late January and is among the world leaders calling for Mr Mugabe’s resignation.
"Zimbabweans will refuse that one of their sons must accompany Bush to his political death," Mr Mugabe said in his speech Saturday.
He also urged his party to remain united to avoid a repeat of its historic election defeat in March, when the opposition Movement for Democratic Change (MDC) won control of parliament.
However, the opposition ceded the presidency to Mr Mugabe when challenger Morgan Tsvangirai pulled out of a second-round run off citing violence against his supporters.
Talks have stalled over implementing a power-sharing deal which would have left Mr Mugabe as president and made Mr Tsvangirai prime minister.
With the two sides deadlocked, Ms Frazer said that "there has been no government in that country since the March elections".
Mugabe threatened this month to hold new elections "in the next one-and-a-half to two years" if the power-sharing arrangement fails.
While the political process is paralysed, the southern African nation economy remains in free fall, with the world’s highest inflation rate of around 231 million per cent.
Washington has imposed sanctions on Zimbabwe and shows no signs of lifting the economic pressure as long as Mr Mugabe is at the helm.
"We were prepared to use American influence to negotiate with the World Bank and the International Monetary Fund to clear the 1.2 billion dollars Zimbabwe debt, but now we are no longer prepared to do that," Ms Frazer added.
The US envoy also let it be known that Mugabe may one day pay for his strong-arm tactics against his political opponents.
"The longer he continues to hold on to power the better the chances of him taking a seat next to Charles Taylor in The Hague," she said in a reference to the former president of Liberia now on trial for war crimes.