(Updates with sanctions details, paragraphs 4-6, adds byline)

By Tabassum Zakaria

WASHINGTON, June 28 (Reuters) - President George W. Bush on Saturday ordered U.S. sanctions against the "illegitimate" government of Zimbabwe, and called Friday's election a "sham" in which President Robert Mugabe appeared heading for a landslide victory.

He also said the United States would press for U.N. action, including an arms embargo.

"Given the Mugabe regime's blatant disregard for the Zimbabwean people's democratic will and human rights, I am instructing the secretaries of State and Treasury to develop sanctions against this illegitimate government of Zimbabwe and those who support it," Bush said in a statement.

The United States first imposed sanctions in March 2003 and later widened them to apply to more people accused of undermining democracy in Zimbabwe. U.S. sanctions bar Americans from engaging in any transactions or dealings with them.

If the United States imposes sanctions on Zimbabwe's government and its agencies, that would be the first time those entities were targeted, the White House said.

Bush has instructed that the Treasury and State departments "build on the current list of more than 170 persons and entities, as well as potentially add sanctions against the government of Zimbabwe," White House spokesman Gordon Johndroe said. "To date, we have not had sanctions on the government and its parastatals."

Mugabe is heading for a landslide victory in a one-candidate election boycotted by the opposition and is expected to be sworn for a new term on Sunday, government sources in Africa said.

Opposition leader Morgan Tsvangirai remained on ballot papers after electoral authorities refused to accept his decision to withdraw on the grounds of violence against his supporters. He has taken refuge in the Dutch embassy.

"On Friday, the Mugabe regime held a sham election that ignored the will of the people of Zimbabwe," Bush said.

"The international community has condemned the Mugabe regime's ruthless campaign of politically-motivated violence and intimidation with a strong and unified voice that makes clear that yesterday's election was in no way free and fair," Bush said.

The U.N. Security Council has expressed deep regret and said a free and fair vote had been impossible.

"We will press for strong action by the United Nations, including an arms embargo on Zimbabwe and travel ban on regime officials," Bush said.

He said the United States stands ready to support a "legitimate government" through development assistance, debt relief, and normalization with international financial institutions.

The United States will continue to provide food assistance and AIDS treatment, said Bush, who was spending the weekend at Camp David.

(Reporting by Tabassum Zakaria; Editing by Sandra Maler)

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