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* "You hit me, I hit you," Mugabe warns critics in West
* Says UK, U.S. companies could face "tit-for-tat" action
* Mugabe, 89, and ZANU-PF party are sanctions targets
By MacDonald Dzirutwe
HARARE, Aug 25 (Reuters) - Zimbabwean President RobertMugabe threatened "tit-for-tat" retaliation against companiesfrom Britain and the United States on Sunday if the Westernnations persisted in pressuring his government with sanctionsand what he called "harassment".
Mugabe's latest verbal broadside against his main Westerncritics followed their questioning of his re-election in a July31 vote that his rival Morgan Tsvangirai denounced as a "coup byballot" which he said involved widespread vote-rigging.
Mugabe, who at 89 is Africa's oldest leader, has rejectedthe fraud allegations and was sworn in on Thursday for a newfive-year term in the southern African nation that he has ruledsince its independence from Britain in 1980.
"They should not continue to harass us, the British andAmericans," he told supporters at the funeral of an air forceofficer.
"We have not done anything to their companies here, theBritish have several companies in this country, and we have notimposed any controls, any sanctions against them, but time willcome when we will say well, tit-for-tat, you hit me I hit you."
British companies in Zimbabwe include banking groupsStandard Chartered Plc and Barclays Plc. Theseare already the target of a so-called "indigenisation" policythat requires they cede a majority stake to black Zimbabweans.
The policy has also been applied to foreign mining houses inthe mineral-rich country including those owned by South Africancompanies such as Impala Platinum.
The United States has a far more limited corporate presencein Zimbabwe than Britain.
TARGETED SANCTIONS
Mugabe and prominent members of his ZANU-PF party, which wona two-thirds majority in the July 31 election, are the targetsof financial and travel sanctions imposed by the United Statesand the European Union. These were applied by Washington andBrussels to punish alleged election-rigging and abuses of power.
The European Union in March eased most sanctions againstZimbabwe after the country's voters approved a new constitutionwhich paved the way for July's poll, but kept Mugabe and nine ofhis closest associates on the list.
It will review relations with Zimbabwe because of its"serious concerns" about the election, EU foreign policy chiefCatherine Ashton said on Thursday. Its verdict on the vote willbe crucial to a decision on whether it continues to easesanctions..
Britain said last week Mugabe's re-election could not bedeemed credible without an independent investigation intoallegations of voting irregularities.
U.S. officials also said the July 31 election was flawed andWashington had no plans to loosen sanctions until there weresigns of change in the country.
In contrast, observers from the regional 15-nation SouthernAfrican Development Community (SADC) and the African Unionbroadly endorsed the vote as free and peaceful, and called onall parties to accept its results.
Mugabe still enjoys support in Africa for his role in theliberation guerrilla war that helped end white-minority rule inwhat was formerly Rhodesia, and led to its independence.
He frequently accuses his critics of racism and of wantingto recolonise Zimbabwe. "They think, we the blacks are inferior,they are superior. But in Zimbabwe we will never accept that awhite man, merely because he is white is superior, no. We willchase them away," Mugabe said about Western powers on Sunday.
